Benefits And Disadvantage Of Company Essay

835 Words Mar 29th, 2016 4 Pages
The company will have many kinds of stakeholder which include internal and external stakeholders. The stakeholders are people who interest or stake in an organization and their opinion can affect the organization. The main stakeholders incorporate shareholders, creditors, employees and the community. There are advantage and disadvantage for stakeholder when dealing with or using a limited liability company (LLC) structure for small businesses in New Zealand.

In a limited liability company, shareholders will have many advantages and also some disadvantages under the New Zealand company structure. The shareholders have tax benefits in a Limited Liability Company. Shareholders can choose to be taxed as a sole proprietor, partnership which pass through tax entities (i.e., no double taxation) (David, n.d.), the money these companies earn is taxed only once. The company tax is 28% flat and the top personal rate is 33%, LLC provides more tax choices to minimize the tax fees. Shareholders in LLC have limited liability. (Section 97 of Companies Act 1993). Limited liability protects the personal assets of a shareholder from claims made against the corporation and protecting shareholders from liability for the acts of the corporation (Broemmel, n.d.). The LLC business has separate legal entity (Section 15 of Companies Act 1993) Salomon v Salomon (1897). This mean obligations and property are its own and not those of its participants. Its existence continues unchanged even if the…

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