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Limited Liability Essay

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Limited Liability Corporation, Limited Liability Partnership, Corporation
Michael Feagin
FIN/419
March 13, 2015
Professor Frederick Schutz

Limited Liability Corporation, Limited Liability Partnership, Corporation
Every business is started for a particular purpose. It can function as a charity, a firm, or simply a retail store. The way each business is structured is important, because it can help or hurt it in the long run. It should match what the business is trying to accomplish and also its time frame. It can changed the way it is taxed, dissolved, employee’s outlook etc. Limited liability corporations, limited liability partnerships, and Class C Corporations approach everyday business in certain ways. I’ll look further into the roles they play, their differences, and some of their similarities.
Limited Liability Corporations
A limited liability corporation is one of the most popular business structures used today. Still, this doesn’t make it better than the other two. The name is somewhat self exlpainatory. Although the cost can be higher to start up, it gives a business different roles and more flexibility. One thing that really stands out is that it avoids double taxation. “Situation that occurs when after-tax corporate earnings are distributed as cash dividends to stockholders, who then must pay personal taxes on the dividend amount” (Gitman & Zutter, 2014). Owners in this structure are considered members. These members are not responsible for for its company’s debts. Furthermore, it doesn’t have a many internal constraint, and allows management to be chosen by its members. Ultimately, it plays a protecting role for an independently run business.   
Limited Liability Partnerships
Limited liability partnerships is easy to start, have more leverage, but create some additional risks. Like a limited liability corporation, the general partner is not personally responsible for business debts. This means that they can be sued only in certain...

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