Competitive Advantage Of Limited Liability Company (LLC)

Corporation is a business separated from its owners. Corporations can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes. Advantages of a corporation is it is a limited liability that protects owners from losing more than they invest. The business can achieve large sizes due to marketability of stocks. It receives certain tax advantages. Has greater access to financial resources allows growth within the company. Attracts employees with specialized skills which can help the business. Disadvantages of a corporation is double taxation because both cooperate profits and dividends paid to owners are taxed, although the dividends are taxed at a reduced rate. It is more expensive and complex to form a corporation. Government has more regulation in a corporation. Another disadvantage is financial reporting requirements make the operations public. Limited Liability Company (LLC) is a form of a private limited company in the United States. Limited Liability Company is a business that combines the taxation of a partnership or sole proprietorship with the limited liability of a …show more content…
Each partner contributes to all aspects of the business, including money, property, labor or skill, and in return they share the profits and losses of the business. Advantages of a partnership is it is more expertise and managerial skill available. Has a relatively low organizational costs income taxation as personal income of partner’s. It has fundraising abilities that are enhanced by more owners. Disadvantages of a partnership is that owners have unlimited liability; may have to cover debts of others and it is less financially sound. It may dissolve or must reorganize when a partner dies. Difficult to liquidate or terminate the business. Potential for disagreements or conflicts between partners. Partnerships are difficult to achieve large scale