week one indiviual assignment

Essay by mlweidmanUniversity, Bachelor'sA, November 2014

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Page | � PAGE \* MERGEFORMAT �7� Limited liability company and partnership PAPER

Limited Liability Company and Partnership Paper

Michelle L. Weidman


October 13, 2014

Maria Johnson


Limited Liability Company and Partnership Paper

"Twenty years from now you will be more disappointed by the things you did not do than by the ones you did do. So throw off the bowlines. Sail from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover." ~ Mark Twain, author (Top)

Over the long term, people who run their own businesses have the potential to make more money than those who work for someone else. Most people have dreams of acquiring great wealth and the way to get there is to own a business. Job security is another reason and a lot of people just prefer being their own boss. Another attractive element to owning one's business is that their time is their own (Why).

When the decision has been made to start a business there are different factors that must be considered when deciding upon a business structure that will best serve the needs of the business. Recently there has been a growing number of formations of limited liability companies and limited liability partnerships, the features of which are defined herein.

Limited Liability Company

The limited liability company (LLC) is considered a hybrid type of legal structure that provides the limited liability features of a corporation as well as the tax efficiencies and operational flexibility of a partnership. LLC "owners" are typically referred to as members and, depending on the state, can consist of a single individual (one owner), multiple individuals, corporations or other LLC's.

Like shareholders in a corporation, the federal government does not tax LLC's as separate business entities. Rather, all profits and losses...