Limited liability Company<\/p>\n
Students Name:<\/p>\n
Institution:<\/p>\n
Date:<\/p>\n
Limited Liability Company<\/p>\n
Different from other business structures, a limited liability company has separate and<\/p>\n
dissimilar legal rights and obligations. The most valuable thing about LLC is that its<\/p>\n
members are not accounted for debt or liabilities of the company. Making it stand out from<\/p>\n
the rest businesses structures LLC benefits is that it\u2019s flexible, easy to change, and simple to<\/p>\n
run. For instance, if the LLC owner separates his assets from the business, he should be<\/p>\n
protected from the debts and liabilities. If the LLC is said to go bankrupt, the creditors can<\/p>\n
only gather their debts from the assets of the business.<\/p>\n
An S corporation is a business structure that has attractive tax benefits, and its<\/p>\n
liabilities are protected with the corporation. S corporation is essential where businesses<\/p>\n
are small and large as members may pay less on tax. S corporations are not entitled; hence<\/p>\n
international revenue service manages taxation and prevents the company from double<\/p>\n
taxation (Lux & Mclean 1998). Both business structures, the S corporation, and LLC are<\/p>\n
obliged to taxation. Disparities occur in that an S corporation, taxes are lined down to<\/p>\n
individuals while in LLC, the organization is taxed.<\/p>\n
During business formation, it is essential to view taxation as it is considered as an<\/p>\n
expense. From the case discussed above, it is crucial to forming an S corporation rather than an<\/p>\n
LLC, as the taxes of the LLC, don\u2019t favor individuals. Decision making may be critical, but<\/p>\n
considering employee numbers and the business owner will help come to a decision<\/p>\n
quickly.<\/p>\n
The main advantage of both LLC and S corporation is that they offer limited liability<\/p>\n
protection; hence it\u2019s advisable to protect your assets by forming an LLC. With LLC being<\/p>\n
flexible and easy to manage, many people are attracted to LLC (Koss, 2007). S corporation<\/p>\n
has a vast advantage over LLC in that they can acquire funds from investors and other money<\/p>\n
lending institutions.<\/p>\n
Contrary S corporations\u2019 members can receive dividends that, in return, lower their<\/p>\n
tax billing. When it comes to management, LLC members are privileged to manage and run<\/p>\n
the business compared to S corporation. It\u2019s there essential when forming a business entity to<\/p>\n
consider factors that affect the operations. One key element is taxation, such that how does<\/p>\n
the tax affects both the business and the employee. Another factor is to consider your sources<\/p>\n
of capital; they are your investments or from other investors. Management and ownership are<\/p>\n
also keys in choosing the business structure you wish to approach based on your type of<\/p>\n
business. With the ease of formation, it is better to go with a design that you are free <\/p>\n
to establish.<\/p>\n
References<\/p>\n
Koss, A. M. (2007). Best practice guidance for angel groups\u2013deal structure and<\/p>\n
negotiation.\u00a0Angel Capital Angel Educational Foundation,<\/p>\n
http:\/\/www.angelcapitalassociation.org\/data\/Documents\/Resources\/AngelCapitalEducation\/<\/p>\n
ACEF_BEST_PRACTICES_Deal_Structuring. pdf.<\/p>\n
Lux, M. S., & McLean, S. A. (1998). The IRS Clears the Air on S Corporation<\/p>\n
Subsidiaries-Proposed Regulations under Code Sec. 1361 (b)(3).\u00a0J. Passthrough Entities,\u00a01,<\/p>\n
29.<\/p>\n","protected":false},"excerpt":{"rendered":"
Limited liability Company Students Name: Institution: Date: Limited Liability Company Different from other business structures, a limited liability company has<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[],"tags":[],"class_list":["post-34584","post","type-post","status-publish","format-standard","hentry"],"yoast_head":"\n