Limited Liability Companies When to form an LLC (Limited Liability Company)(Links to an external...

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Limited Liability Companies When to form an LLC (Limited Liability Company)(Links to an external site.)Links to an external site. discusses why the LLC is one of the most popular types of business...

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Limited Liability Companies

When to form an LLC (Limited Liability Company)(Links to an external site.)Links to an external site. discusses why the LLC is one of the most popular types of business entity. After reading the article and Chapter 30 of the textbook, compare an LLC with a C corporation and with an S corporation. If you were operating your own business, would you choose the LLC as the organizational form for your business? Explain your reasoning.

Guided Response: Respond to at least two of your fellow students’ posts in a substantive manner. Some ways to do this include the following, though you may choose a different approach, providing your response is substantive:

Address students who made the same choice that you did regarding whether to choose the LLC as the organizational form for their business. Using the information from the course textbook and the article, play the role of devil’s advocate and argue why some other type of entity (C corporation, S corporation, or LLC) would be a better choice.
Review the posts made by your peers.

Answered Same Day Jan 29, 2021

Perla · Accepted Answer

Discussion: limited Liability Company – Rationale for selection of Limited Liability Company:
At the outset, the selection of business enterprises depend on several reasons and preferences, however considering risk factor as the key element of rationality, it is always advisable to select a limited liability company. The risk of the investor is limited only to the extent of investment made in the shares. There is no risk of losing the personal properties; as well there is no need to fear about the loss of the company beyond certain limit. The legal behavior of the company isolates the performance implication of the organization to its partners or the business owners.
Though in principle, Limited Liability Company will not provide rational encouragement to business initiative, they do eliminate the fear of incurring personal liability, this gives an incentive to take the risk in business.  When the investor does not need to fear of the business loss and if the investment made by him is safe, then he will come forward and invest in the business, works on for business progression and will take up the risk. This inturn will work for business development at an individual level as well will work for economic development as well.
In the future,

Limited Liability Companies When to form an LLC (Limited Liability Company)(Links to an external site.)Links to an external site. discusses why the LLC is one of the most popular types of business...

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