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Individual Paper - Assignments from the Readings

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Individual Paper - Assignments from the readings

In this short essay I will try to explain Limited Liability Corporation and partnerships. I will also try to put in perspective if I were to establish my own business what would I choose and why would I choose one over the other.
In order to explain this we must first know what is Limited Liability Corporation and liability partnership. According to smallbusiness.chron.com a liability corporation or company is LLC owners, called "members," can manage their businesses or hire professional managers. In addition, LLCs enjoy a lot of flexibility. For instance, they can have as many members as they like, and corporations are allowed to be members. LLCs enjoy freedom from the state-mandated membership and management reporting requirements that corporations have.
Most important, LLCs do not have to pay taxes. Instead, their profits and losses are passed through to their members' individual tax returns in the same way as a partnership. As a result, members enjoy the advantages of avoiding the "double taxation" of corporations as well as receiving tax relief from the poor performance of their LLCs. Also according to smallbusiness.chron.com a liability partnership is LLPs have the same tax advantages of LLCs.
They cannot, however, have corporations as owners. Perhaps the most significant difference between LLCs and LLPs is that LLPs must have at least one managing partner who bears liability for the partnership's actions. With an LLP, whoever is in charge is legally exposed in the same way owners of a simple partnership are exposed. Silent partners and investors in an LLP receive liability protection as long as they do not take on a managerial role. If they do, a court could pierce the veil of liability protection. With the above said it all depends on what it is you are doing and what it is that you want for your

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