Date of Submission
A partnership is typically a business form developed automatically when two or several people engage in a business enterprise for profit. Collaboration in many structures employs its several owners’ flexibilities and relative simplicity of the business together with its operations. In a limited partnership and limited liability partnerships, a partnership is in a position to offer a degree of liability protection (Akerman & Hopkins, 2011). A partnership can be created through a simple handshake; however, responsible partners will prefer to have their partnership planning memorialized in a partnership agreement, preferably with the help of an attorney. Therefore, a partnership is created whenever two or several people engage together in business operations to pursue profit.
Limited Liability Partnership
A limited liability partnership similar to that of a general company; however, there is one crucial difference wherein a majority states, a limited liability partnership is likely to register with the division of country (Gambardella & McGahan, 2010). The importance of this registration is that every partner is not accountable for obligations and liabilities emerging from the wrongful deals, negligence and any misconduct. An LLP fails to offer full liability safety even though it has limited liability for the so-called negligence, omission, and malpractice. Still, there is unlimited personal accountability for the contractual responsibilities of the partnership including promissory notes.
Limited liability Company
The limited liability company is strategically considered the best-known entity as compared to a regular corporation as it is regarded as a hybrid body that brings the liability safety of a C corporation with the tax alternative to be handled as a partnership or a corporation. This form can be outlined with the aim of providing extra flexibility together with unlimited members (Akerman & Hopkins, 2011). It also provides efficiency in the operations and possibilities for an increase that typically makes it attractive for some freelancers. Limited Liability Company is controlled by an operating agreement that describes schemes for business management and also enables one to come up with the ‘control’ of the organization and limit the transfer of interests.
The S corporation is considered as another essential form of corporation that functions similar to the C Corporation however taxed like a partnership (Gambardella & McGahan, 2010). In this form, there are rigid confines on the structure of an S corporation together with the number and types of shareholders. The most important and attractive features of the S corporation is the capability to ‘slice up’ distributions to shareholders and reorganize the allocations. On the other hand, it has some restrictions regarding the ownership which ought to be considered on prior notice.
Under a franchise form of business, an individual or company acquires the mandate to run a local business under a more significant business’s brand (Akerman & Hopkins, 2011). Relying on the franchise arrangement, the local party is likely to fulfilling given standards created by the bigger organization and acquires goods from the more prominent organization as well. For instance, a local fast food restaurant is likely owned by local or regional industry and still operated under a franchise arrangement.
A corporation is considered as a legal institution that is formed to carry out business hence making it an entity-separate form those who discovered it and those that handle the duties of the institution (Akerman & Hopkins, 2011). Similar to a person, the corporation is subjected to tax and can be held lawfully responsible for its operations. The fundamental advantage of corporate status is the avoidance of personal liability; on the other hand, disadvantages are associated with its high nature when starting a corporation and detailed record-keeping that it needs.
Akerman, K. J., & Hopkins, D. S. (2011). U.S. Patent No. 7,912,865. Washington, DC: U.S. Patent and Trademark Office.
Gambardella, A., & McGahan, A. M. (2010). Business-model innovation: General purpose technologies and their implications for industry structure. Long range planning, 43(2-3), 262-271.