Multimedia Activity: Business Organization
In this paperwork, I am going to list the general requirements of an LLC, corporation, and partnership. I will also discuss a business organization that is an LLC giving the reason why it adopted this form instead of the other available forms; partnership and corporation. I will also discuss the advantages and disadvantages that come with LLC.
Through research, it is depicted that the general requirements for a partnership, an LLC, and corporation are, approximately, the same lawfully. It is expected of them that all their general requirements are formed with the intention of making or maximizing profit. Hence, their general requirements must be focused on one thing-after profit. The three associations are required to consist of two or more people. For the three associations to be considered as a business, they are, therefore, expected to be active throughout their operational term. Although they share a lot of similarities as far as their general requirements are considered, they still have some legal differences amongst the three associations. For instance, the people involved in forming LLC have limited liability when compared to both partnership and corporation, hence the reason why they are required to secure a $100,000 workers bond and $1,000,000 in liability insurance ( De Angelis, 2012).
When it come to a partnership, it is a general requirements that all people/parties involved in this association are considered co-owners and each person is both an agent and a principle of the partnership- each hold equal liability. It is a general requirement for this association to be formed under printed partnership accord or articles of partnership. The accord made help in making, all, the rights and duties of the partners clear, thereby, helping in prevention of future wrangle among them-partners. States do vary when it comes to the general requirements of these associations, but many states authorize the stodgy of a certificate of partnership to proof the continuation of a general partnership.
A corporation form of association is considered a lawful unit in the eyes of the law; hence, a corporation, itself, is liable in the eyes of the law and not the individuals (Rogers, 2012).
Currently, many business organizations are adopting the LLC association, but it is coherent that some business associations, especially bank business organizations, would not be willing to join this association, since they may not be willing to disclose their stocks. One of the business organizations that have adopted the use of this association, LLC, comes by the name of Edgewood management. Edgewood management is a good example of Limited Liability Company. The major reasons that drove this company to adopt this association, unlike the implementation of the other associations, are the need to protect their personal assets. For instance, if every person was a multimillionaire, apart from their actions with this companionship, there would be no protection of personal burden in a partnership. In addition, the limited liability company is favored over both a corporation and a partnership because of taxation. We expect double taxation as a general requirement in both a corporation and a partnership. The corporation and partnership associations are expected to pay taxes on, all, income, but an LLC association is taxed once-income is taxed once (Rogers, 2012).
Business organizations that have adopted this form of association, LLC, are said to be enjoying the following benefits; it has limited legal responsibilities, its construction is, more, relaxed than the rest of the associations, and has a lesser filing charge. It is also important to note that the members are taxed on their wages leaving the company not taxed. This creates a healthier environment for continuous wealth generation; hence the reason why business organizations are shifting to this form of association, LLC, as a result of these numerous advantages that it comes with. LLC association requires little rules and regulations, such as associates meetings. LLC structure is thought as a perfect association for small businesses for tax purposes. The mentioned advantages enticed Edgewood management in adopting this association- LLC (De Angelis, 2012).
Advantages and disadvantages are said to come hand in hand- are inseparable. Due to the fact that LLC do not issue stock, it becomes hard for this association to draw numerous shareholders, because shareholders usually want physical certificate as confirmation of tenure (Rogers, 2012).
Rogers, S. (2012).Essentials of Business Law. San Diego, CA: Bridge point Education, Inc.
De Angelis, M. (2012, February 15).Business Entities . Hartford, Connecticut, USA. Accessed