Limited Liability Paper

Limited Liability Paper

Jennifer S Sweet

FIN/419

September 9, 2012

Jennifer Stapp

When establishing a business, a person or people first need to choose which type of business will best suite them and the business. The three most popular forms of businesses are a sole proprietorship, a partnership, and a corporation. All of the business types have their own advantages and disadvantages. Selecting the best type of business can make a difference in whether the business is profitable and successful.

Limited Liability Corporations

A limited liability corporation is a business structure in which the owners have a very limited amount of liability for what may happen with the corporation. Any debts or dealings of the corporation will have little to no affect on the owners of the corporation. There are many rules and regulations that must be followed by a limited liability corporation. Managers of the corporation need to assure that they know understand, and carry out all official procedures set by the legal structure in which corporate laws were developed (Feigenbaum. 2012).

A corporation can have an unlimited number of owners; even another corporation can be an owner or member. Many corporations do not pay taxes as a company. Each of the owners or members claims the profit or loss from the corporation on their personal income tax returns.

Limited Liability Partnerships

A limited liability partnership is a business structure in which one of the partners is legally responsible for the happenings of the business while the other partner(s) are not liable for what may happen with the company. The in-charge partner is responsible because he or she is in the management position of the company. Partnerships