LIMITED LIABILITY COMPANIES

Advantage 5 of LLC

Because of the big size of the limited liability companies, they may enjoy the advantage of economies of scale

Disadvantage 6 of LLC

Business activities of these companies are not private. They are demanded by the government to make public their statement of accounts.

Advantage 2 of LLC

It is easier to raise additional capital on the identity of the company either by borrowing from banks or other financial institutions or by issuing more shares.

Advantage 1 of LLC

Liabilities of owners are limited to the amount of capital contributed.

FORMATION OF LIMITED LIABILITY COMPANY

Limited liability companies are usually guided by the statutes (state laws) in their operations. They are 'legal entities' as the law recognizes them as 'an artificial individuals/human being' different from the owners. An artificial person who can sue and be sued.

Disadvantage 3 of LLC

Limited liability companies suffers from double taxation

Advantage 3 of LLC

Ownership is easily transferable if owners no longer have interest in the company. The shares can be sold and the new owner can assume the role of a shareholder.

Disadvantage 4 of LLC

Possibility of impersonal relationship between the board of directors and the management board is sometimes inevitable as the management lay down policies which sometimes may not be easy to execute by the management board.

TYPES OF LIMITED LIABILITY COMPANY

Private limited liability company Public limited liability company

Advantage 6 of LLC

The company can avail itself of the opportunity of the services of experts who could provide specialized management services that can see the company to success. This is possible because of the availability of funds to do that.

Advantage 4 of LLC

The company enjoys permanence of life in that the company is expected to exist indefinitely irrespective of the death of any shareholder. This confers a distinct advantage on limited liability companies

Disadvantage 5 of LLC

The growth of bureaucracy can bring slow decision making

Disadvantage 2 of LLC

This type of companies suffer from too much control and interference from the government.

LIMITED LIABILITY COMPANIES

business structure where group of people pull their resources together to carry out business/economic activities for the purpose of profit making

Disadvantage 1 of LLC

businesses is not easy to establish because it involves legal procedures that requires lots of documentations.

PRIVATE LIMITED LIABILITY COMPANY

is owned, managed and controlled by individuals or group of people. Their shares are not quoted on the stock exchange which means that they do not sell their shares to the general public, their shares are limited to the members alone and the public cannot subscribe to their shares.

PUBLIC LIMITED LIABILITY COMPANY

otherwise known as joint stock company. They can be owned by group of people but mostly they are owned by government.