what are the characteristics of a limited liability company?

Expert Solution

The legislation governing the creation and characteristics of LLPs have only come recently since 2001. The law states that once an LLP comes into existence it has the capability of doing the same types of activities and business operation as a partnership or a corporation However there are certain characteristics typical only to LLPs.

The various characteristics of a limited liability company are:-

The first advantage of an LLP is that it has the benefit of limited liability for all the members.
They need at least two members
They need to provide disclosures as provided by a company
The accounting and filing requirements are similar to that of a company
Any agreement regarding the functioning of the LLP can be kept confidential among the members
An LLP enjoys organizational flexibility similar to that of a partnership
For taxation purpose, an LLP is treated as a partnership
An LP can create floating charges which is a special type of charge that allows the LLP to buy and sell machinery and plant without needing new consent from the mortgagee, therefore the charge floats over the asset which keeps on changing and is not fixed.
They do not need to provide a lot of documentation and follow procedures like companies, for example, they do not need to organize shareholders meet annually and file the minuted of the meeting.
LLC does not require the appointment of a board member unlike a company

keosha answered 10 months ago

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