Company law case study analysis Example | Topics and Well Written Essays - 2000 words

Company law analysis - Case Study Example ny is a commercial organization that joins the pass-through taxation of a sole proprietorship or partnership with the limited liability of an organization. However, it is not a corporation, rather, a legal type of a business that offers its owners limited liability at various jurisdictions. Advantages of forming a limited liability company (LLC) include; it involves protection of the company’s assets. It will offer a restricted liability security to them, as the owners, for they are not individually responsible for the company’s liabilities or debts. Therefore, creditors will not chase their personal assets, such as the building, savings accounts, among others, in attempts for them to pay the business debts. In addition, forming an LLC will offer a pass-through taxation, in that; they will not have to pay any taxes at the business level. Any company loss or income will be "passed-through" to them, as the company owners and recounted on their individual income tax returns. Any due tax will, therefore, be paid at the individual level (Martin, 2011, p.28). Another advantage is that there is heightened credibility, whereby, this form of accompany night assist their new company create reliability with its prospective vendors, partners, and customers, since the y will the owners have made an official obligation towards the business (Hollowell, Miller, Clarkson &Cross, 2012, p.58). In addition, if needs limited compliance requests in that, the company will face lesser state-enacted yearly requirements than other forms of corporations. It also has a flexible management structure, such that, they will be free to form any business structure that they will agree on. Therefore, the owners can choose to manage the company or have managers to do so for them, unlike in major corporations that have board of directors and managing officers manage them. Lastly, this kind of a company has less restriction, in that, it they will not be limited on whom an owner can be or the