Business And Limited Liability Company

| A general partnership allows for a pooling of capital and talent and a sharing of the risk. Additional benefits to a general partnership include additional expertise in decision making and a sharing of the workload. General partnerships are easy and inexpensive to start up.

Limited Partnership: This partnership consists of a blend of both general and limited partners. This kind of agreement/partnership lets the general partner manage the entire operation, but they are still fully liable for debts. The limited partner only invests his/her money, and can only lose what they invested.

General Partnership: Occurs when two or more individuals get together to operate a business with the intention of making profit. Each individual is a general partner of the business and all profits and losses are shared between the partners. General partnership agreements can be a written or verbal agreement.

Limited liability partnership (LLP): In a LLP no general partners exist, only limited partners exist to create the business as a limited liability under this form of partnership. LLP’s are typically used for any professional type of business where all partners/owners (a minimum of two are required), have a voice in the taxation structure of the business.

General partnership is formed when at least two people start a business for profit. A “statement of partnership authority” may be filed at the discretion of the partnership.

Rationale. The advent of the limited liability company in the 1990’s came about primarily to promote small business start-ups by providing substantial asset protection, simpler rules, and favorable state and local tax treatments (Millon, 2007; Riles & Whitlock, 2003: Vandervoort, 2004). LLCs are also typically easier and less expensive to form and manage than a corporation and quickly became the entity of choice (Hopson & Hopson, 2014).

The technological advances will have a minimal impact on Ridiculous Crepes, because the food products will not be complex. However, the use of technology will enable and enhance most of the company’s operations. For example, the use of internet will not only provide an additional venue for sales, but it will also facilitate the communication with manufacturers’ agents and channel members, the internet will also expedite the process of delivery or orders.

For the past two years, Acme has been working out of the owner’s garage as a sole proprietorship. Which means there is one entity and there is no separation of the company and the owner. The sole proprietorship and the owner are one and the same meaning the business is not taxed but rather it is the owner’s income. The sole proprietorship is the least expensive to form. This type of entity has disadvantages of the owner being liable for all the debts of the company. Another disadvantage is the owner has to sign all contracts in their name which makes them personally liable for any legal action that could incur. Since Acme is a sole proprietorship, if someone is hurt on a business related

Many rules are included and must be followed in order for a limited partnership to be valid and to work properly. A limited partnership is a type of partnership that has two types of partners- a general partner and a limited partner. The general partner of a limited partnership invests capital and manages the business. The general partner has unlimited liability which means they are personally liable for the debts and obligations of the limited partnership. The limited partner in a limited partnership invests capital but does not participate in management. The limited partner has limited liability, which means they are only liable for the debts and obligations of the limited partnership up to their capital contributions but they are not personally liable.

A limited liability company can be best depicted as a hybrid between a corporation and a partnership Kubasek, (2015). Like a corporation regarding limited liability, and its similarities to a partnership, in regards to the adaptability of dividing profit among the proprietors. Also, adaptability with respect to how profit and management authority are resolved (Oon, 2012). Shania would need to go into an extremely detailed agreement that spells out every one of the subtle elements of the business. The Colorado Limited Liability Company Act was received in 1990. An LLC consolidates the concepts of organizations for tax purposes and corporations for liability purposes (The Colorado Business Resource Guide).

A limited partnership is similar to a general partnership. It does have several key differences. While a general partnership has to have at least 2 general partners a limited partnership has to have at least 1 general partner and 1 limited partner. A limited partner does not run the business. A limited partner is similar to an investor or shareholder. A limited partnership also should have a partnership agreement between the general and limited partners.It can be an oral or a written agreement. This partnership agreement can contain for example; how the business will be conducted,distribution of labor or how profits are divided.The partnership has to be registered with the Secretary of State where the business is

General partnership: Under a general partnership, the owners of the business share equally in the responsibilities of the business and are equally liable for the obligations of the organization. The profits may be divided equally on a 50-50 basis between the partners, or in accordance with the original agreement contracted when the business was set up (General partnership, 2012, Quick MBA). Depending on the state, the partners may be jointly liable for one another's debts, which means if one partner is liable for a financial obligation and cannot pay the debt; the other partner is liable for the debts of the partner (General partnership, 2012, Quick MBA). Other states merely have several liability, meaning that the partners are individually liable for their debts that they gain over the course of doing business, but not personally liable for the partner's debts (General partnership, 2012, Quick MBA).

Providing for your family is a requirement. Some men and women go to work daily in an effort to make sure bills are paid, and food is on the table. All jobs are not easy; some are mentally stressful, and others are hard on your body. With all this being said, the American dream is to go into business, someday. Some ways of going into business are through sole proprietorship, partnership, corporation and limited liability companies. This paper will discuss the different formation of a business and advantages/disadvantages, the tax and liability issue of each and the form of business I would choose if I started my own business.

According to the Partnership Act 1891 (SA), section 1(1), a partnership is defined in four sections. These sections relate to a business which includes any trade, occupation or profession that is carrying on involving continuity and system in common in terms of mutuality of rights and obligations with all the partners, and lastly with a view to profit, therefore resulting in an incorporated limited partnership. A corporation, however, is defined as a separate legal entity from its owners that also has the rights and responsibilities that an individual or a partnership entity possesses. This means that corporations and their shareholders have the right to participate in the profits, but will not be held accountable for the company’s debts and legal issues.

There are many different structure of business in our economy, like sole traders, joint ventures, syndicates, partnerships and corporation. Each structure of business has its own advantages and disadvantages. In following paper, I will compare the advantages and disadvantages using the business structure of a partnership and a corporation, and discuss where using one of these structures would be preferable to the other one.