75.8k views
5 votes
one of the real benefits of limited liability companies (llcs) that is unavailable in corporations is:

User WolVes
by
8.1k points

1 Answer

4 votes

Final answer:

The unique benefit of Limited Liability Companies (LLCs) not found in corporations is pass-through taxation, where the business itself is not taxed, unlike corporations which can face double taxation. LLCs also offer flexibility in management and fewer governance requirements.

Step-by-step explanation:

One of the real benefits of Limited Liability Companies (LLCs) that is unavailable in corporations is the flexibility in taxation.

LLCs offer the advantage of pass-through taxation, where the business itself is not taxed on its income. Instead, the income is 'passed through' to the individual owners, and they report the income on their personal tax returns, potentially avoiding the double taxation that corporations can be subject to.

Additionally, LLCs provide flexibility in management and fewer governance requirements compared to the more structured environment of corporations.

While both LLCs and corporations limit the liability of the owners to their investment in the company, safeguarding personal assets, it's the taxation advantage that is unique to LLCs. Unlike corporations, LLCs also do not require strict adherence to corporate formalities such as holding board meetings or maintaining minutes, allowing for more straightforward management.

However, it is important to note that both LLCs and corporations facilitate raising capital through various means and offer perpetual existence, though the means of raising capital can differ, with corporations typically able to issue stocks to a wider range of investors.

User Ayobamilaye
by
8.2k points