What is ‘limited liability company – LLC’
The limited liability company (LLC) is a corporate structure in which members of society are not personally liable for the debts or liabilities. Companies with limited liability are essentially hybrid entities that combine features of corporations and partnerships or sole proprietorship. While the characteristic of limited liability similar to a Corporation, pass through taxation to the members of OOO is a characteristic feature of partnerships.
Penetration ‘of the limited liability company – LLC’
Although, which have some attractive features, they also have several disadvantages, especially in terms of the structure of the Corporation. LLC should be dissolved in the event of the death or bankruptcy of a member, unlike a Corporation which can exist forever. In addition, may not be appropriate when the goal of the founder is to eventually become a public company.
The main reason is chosen as the ownership structure is to limit the personal liability of Directors. OOO, this is often perceived as a combination of partnership, which is a simple business education of two or more of the owners in accordance with the agreement, and the Corporation, which gave certain guarantees responsibility. An LLC is a more formal partnership agreement that requires articles of organization to be filed with the state. OOO-it’s much easier to set up than a Corporation and it provides great flexibility along with protection. However, creditors may be able to “piercing the corporate veil” in cases of fraud or when legal and reporting requirements were not met.
The differences between the partnership and the limited liability company
The main difference between the partnership and the LLC that the LLC is intended to separate the assets of the company due to personal property of the owner, which has the effect of insulation of owners from liability for the debts and obligations of the company. The LLC functions like a partnership in that the profits of the company to the owners tax return. Losses can be set off against other income, but only up to the amount of investment. OOO files only an informational tax return.
In the terms of the sale or transfer of business agreement on the continuation of business is the only way to ensure a smooth transfer of interests, when one of the owners leaves or dies. In the absence of agreement on the continuation of business, the company needs to be dissolved in case of bankruptcy or death of one partner.