Types of Limited Company
Recently, the industry has formed another type of business structure that is the limited liability company. This business type contains elements of partnership, corporations and proprietorship.
Forming a limited liability company would cost you big finances that differ from one state to another.
Forming a company entails lots of requirements involve in legal registration and other things important that makes a company going. One of the business structures that attract many business owners is the limited liability company. This is because of its advantage of imposing limited liability of the company as set by the state’s laws. The good thing about this limited liability company is that it keeps the business while separating the personal expenses from the business expenses. Moreover, the limited liability company has different types that are more flexible to choose. Each type offers its own benefits.
Different Types of Limited Liability Company
One of the types is the sole proprietorship. This type of Limited Liability Company is owned and operated by a single person. This means that the owner is liable for any undertakings that include business transactions, taxes and debts that the business owes. Sole proprietorship is ideal for small business owners. Likewise, this is the least expensive type of business when filing registration and at the same time involves little amount of paperwork. Another type of Limited Liability Company is the general partnership that involves two or more members. In this structure the liabilities are evenly distributed to each co-owner. Thus, all the business undertakings are the responsibility of each member. On the other hand, each co-owner can decide about the sale of assets and required to pay for their individual shares in the business exam.
In like manner, another business type that is similar to general partnership is the limited partnership. In this type more members are sharing responsibility. However, one member has limited amount of liability while another member takes the complete and full liability of all the business undertakings. In this type, the member of the business that has limited liability is the partial business partner. This means that the member has limited power in decision-making about the company and at the same time receives limited profits according to the limited liability involve. The last type of Limited Liability Company is the family limited partnership in which all the family members are included in the business. This is the ideal business structure in case all family members want to put their assets in a business. In this way the money of the family is saved while running the business.
Moreover, when getting into this business structure involves agreement s that is critical to the business. The partnership agreement allows other members to take over in place of the deceased member of the company. This is also possible in case the company is dissolved.
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