What are partnerships and limited liability companies?
Some entrepreneurs chose instead of a company limited liability companies or partnerships. A partnership is also a business may be called and made reference to an Association of a group of people working together in a company or professional practice.
Then the companies have strict rules on how they are structured, partnerships and limited liability companies, the distribution of administrative authority, profits and property under very flexible owners rights.
Partnerships classified in two categories. General partners are subject to unlimited liability. If a company cannot pay its debts to its creditors, payment of the General partners question of personal property. General partners have the authority and responsibility of the business to manage. They are similar to the President and other officers of an organization.
Sponsors are exempt from the unlimited liability, which have the General partners. They are not responsible as individuals, the obligations of the company. They are junior partners who are entitled to the profits of the company, but they generally do not participate in the management of high level of the company. A partnership must have one or more general partners.
A company limited liability company (LLC) is more and more to small business. An LLC is a limited liability company, and it is as a partnership for the flexibility of the profits to distribute among owners. Its advantage over other forms of property is the flexibility in which authority for profit and the management be determined. This can be a disadvantage. The owners have agreements very detailed on the way of profit and the management responsibilities are divided. It can be very complex and generally requires the services of a lawyer to draft the Convention.
A partnership or LLC agreement determines how to make a profit will be distributed among the owners. While the shareholders of a corporation to receive a share of the profits which are directly related to how many shares they own, a partnership or LLC, are not necessary to distribute the profits according to how much each partner has invested. Invested capital is only of the factors that are used in the distribution and the distribution of profits.
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