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Legal Forms of Business Organization

In: Business and Management

Submitted By aevanoff
Words 1062
Pages 5
Limited Liability Corporation, Limited Liability Partnership, Corporation Paper
Angelika Evanoff
FIN/419
July 20, 2015
Mrs. Michele Huss

Limited Liability Corporation, Limited Liability Partnership, Corporation Paper
The purpose of this paper is to discuss three legal forms of business organization; a limited liability corporation or company, a limited liability partnership, and a class C corporation. The paper begins with a brief description of each structure, followed by a comparison and contrast of each form’s advantages and disadvantages. The author finishes by citing examples in which she would use each type of business structure if establishing a new business. It is important to choose the appropriate legal form of organization because the decision affects owner’s risks, raising money, and how profits are taxed (Gitman & Zutter, 2014). Readers can expect to have a better idea of the various options available to entrepreneurs after reading this essay.
Legal Forms of Business Organization
The three most popular structures of company organization are the sole proprietorship, the partnership, and the corporation. A sole proprietorship has one owner while a partnership has two or more owners, and a corporation is an entity created by law (Gitman & Zutter, 2014). The forms offer limited liability or unlimited liability to its owners. Various structures that provide limited liability include a limited liability corporation, limited liability partnership, and a class C corporation. A limited liability company “is a hybrid legal entity that has both the characteristics of a corporation and of a partnership” (“Limited Liability Company,” 2011). An LLC enjoys limited liability protection as a corporation. For example, owners in an LLC are only responsible for their investments. They are not held accountable for the losses of other owners in the...

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