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Limited Liability Corporation and Partnership

Write a 700- to 1,050-word answer in which you explain roles of limited liability corporations and partnerships. If you were establishing your own business, under what circumstances would you choose one instead of the other? APA format

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Limited Liability Company is a form of business that provides limited liability to its owners. This is a business entity that has some of the important advantages of a corporation and of a partnership or a sole proprietorship. When there is a small business the limited liability company provides the benefit of pass through taxation. On the other hand the limited liability company provides the advantage of limited liability.

The role of a limited liability company is to provide a small business with an existence separate from that o its owners. The members of a limited liability company cannot be held liable for the debts of the company. Further, a limited liability company can select is means of profit distribution. The LLC has much more flexibility. In addition, it has an important advantage of unlimited partnerships that is the limited liability company profits, losses and expenses flow through to the members of the company. This means that double taxation is avoided. As the limited liability company has fewer requirements like recording of resolution or keeping of formal minutes, the limited liability company is far easier to operate than a corporation. In short, the role of Limited Liability Company is providing a small business owner with the benefits of sole proprietorship as well as the benefits of corporation(Stephenson. J, & Mintzer R, 2008).

A partnership on the other ...