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…
Limited liability companies (LLCs) offer business owners several advantages over sole proprietorships, partnerships and in some cases S and C corporations. Business operators who take advantage of LLC business formation can realize significant financial benefits and can also use living trusts to facilitate exchanging limited liability company ownership more easily relative to using a will. LLCs offer the asset protection enjoyed by corporate entities, are less expense to maintain and require…
A limited liability company is a hybrid business organization that takes the limited liability aspects of a corporation and merges them with the tax benefits and operational flexibility associated with a partnership. The Commonwealth of Virginia defines a Limited Liability Company or LLC as an entity that is an unincorporated association having two or more members that is organized and existing under the Virginia Limited Liability Act. § 13.1-1002. In the Commonwealth, the first step in…
LIMITED LIABILITY COMPANY Like a corporation, a limited liability company upholds limited liability features. It also ensures pass-through taxation and flexibility of partnerships in its operations LLC owners are referred to us ‘members’. A member can be a single person (owner), two or more persons, corporations and other LLCs The LLC members file federal tax return for facilitation of taxes unlike shareholders of corporations. This is due to the fact that LLCs are not regarded as separate…
Limited Liability Companies (LLCs) Advantages of LLCs A limited liability company (LLC) is seen as “combining the most advantageous features of partnerships and corporations” (Kubasek, Browne, Herron, Dhooge, Barkacs, 2015b, p. 266). Perhaps the most significant aspect is the variety of choices the LLC has upon its inception which are included in the operating agreement. “[T]he enormous flexibility and contractual nature of the LLC may provide advantages such as clearly negotiated and defined…
There are many different types of business to consider when an individual starts their own business. The three main types are a Sole Proprietorship, Corporation and a Limited Liability Company. There are also many areas of business that an individual could pursue. Personally, if I could open my dream business it would be an equine (horse) boarding business ran by my husband and I. This business would involve the boarding of horses for extended periods, giving them quality care while their…
I would advise Shania that the current economic environment the best option for the formation of her company is that of a Limited Liability Company, or LLC. This is because it offers the pass-through tax status and the safety of liability protection of a corporation. This would allow her to only be taxed once like a sole propriety or a partnership, which helps small-business owners keep their earnings. However, remove the personal liability as any action against the business can only act…
1.0 Company Description 1.1 Legal Form of Business Power Hour Fitness will be a Limited Liability Company (LLC) consisting of three members, Nicole Bauman, Salena Kreitler, and Kelsey Schmidt. This form of business will provide a great advantage for Power Hour Fitness as it is a hybrid of certain features of a corporation and a partnership. As a Limited Liability Company, the three associates avoid major risks such as within a partnership where partners are responsible for all debts. Instead,…
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…
If there are many investors having no clear majority interest, the management team of a corporation can operate the business without any real oversight from the owners. Looking at all these options that Jeb and Josh have, I would recommend that Arcadia Sports create their business as either a Partnership or a Limited Liability Company. A Limited Liability Partnership would be the best option because they will have one general partner - Josh who manages the business, and one limited partner -…