Question

Maria wants to start a new business in collaboration with her husband and brother-in-law. the features she is looking for in the business are as follows: least possible regulatory controls, faster decision making, and ease of organization. she also wants a business in which she will not be forced to pay off any business debts from her personal assets. which type of business ownership will be best suited to her needs?

Answer 1

The type of business ownership that will best suit Maria is a Limited Liability Company (LLC).

A Limited Liability Company (LLC) is a type of business ownership model that combines the features of a corporation and a partnership or sole proprietorship.

It has the following features:

1. An LLC is a separate legal entity distinct from its members. It can do business in its own name.

2. Its major advantage is that the assets and liabilities of an LLC is distinct from the members’ personal assets and liabilities. So, members’ personal assets are protected.

3. An LLC only needs to file an informational return. The members of an LLC report their share of profit in their individual tax returns, so double taxation doesn’t exist.

4. An LLC only requires a formal filing of the Articles of Association as opposed to the range of filings for a full-fledged corporation. So, the paperwork and regulatory controls are less.

5. Members of an LLC can manage the company or delegate it to a separate management team. They may have official periodic meetings or not, according to their convenience.