Question

3. What are the advantages and disadvantages of a limited liability company?

3. What are the advantages and disadvantages of a limited liability company?

Homework Answers

Answer #1

Advantages of the limited liability company are:

  1. Debt and obligation are limited or restricted to their own investment done.
  2. Taxation benefit as revenue will be considered as personal income and no other tax will be imposed.
  3. Can have as many as people be owner and there is no limit to it
  4. There is no requirement of having board of directors or anything such. Owner can run the company as per his own discretion

          

               Disadvantage of the limited liability company are:

  1. Issue in raising fund and brining capital to the business like corporates do
  2. Government restriction applies on business as per the guideline for the LLC
  3. Paying higher taxes in context of personal income
  4. Different state law takes LLC defiantly hence a lot of confusion in doing business
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