{"id":2989,"date":"2025-08-22T00:02:34","date_gmt":"2025-08-22T00:02:34","guid":{"rendered":"https:\/\/www.edudorm.com\/learn\/?p=2989"},"modified":"2025-08-22T00:02:36","modified_gmt":"2025-08-22T00:02:36","slug":"limited-liability-company","status":"publish","type":"post","link":"https:\/\/www.edudorm.com\/learn\/study-hub\/company-analysis\/limited-liability-company\/","title":{"rendered":"Limited Liability Company"},"content":{"rendered":"\n<h2 class=\"wp-block-heading\">Advantages of a Limited Liability Company<\/h2>\n\n\n\n<p>The McGee Cake Company may enjoy benefits from a Limited Liability Company (LLC) as it does not have a legal responsibility and this means that members cannot be held liable for company\u2019s debt. In addition, Limited Liability Company enjoys profit through taxation in that taxes are straightforward or in other words the company is allowed to select whether it should be taxed as a partnership or as a sole proprietorship (Warda, 2007). Writers who offer <a href=\"https:\/\/www.edudorm.com\/edudorm-services\/assignment-services\/management\/strategic-management-assignment-help\">strategic management assignment help<\/a> at Edudorm essay writing service notes that on the same note, the company is not liable for federal taxes.\u00a0Thirdly, it has a limitless ownership and this means that there are no legal structures imposed in Limited Liability Company and so the company can have as many members as possible.\u00a0Fourth, LLC has an effective management structure since it does not require formal minutes or annual meetings and so Limited Liability Company can be managed by members or hired manager (Warda, 2007).<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Disadvantages of a Limited Liability Company<\/h2>\n\n\n\n<p>In Limited Liability Company, building capital is low since it cannot be issued with stock to increase funds.\u00a0 Since there is no strict corporate structure,\u00a0investors may fail to contribute their money to Limited Liability Company. Secondly, it requires higher fees such as fees for annual report.\u00a0 It is also hard to transfer the LLC ownership and LLC can break up if a member has a bankrupt or dies (Warda, 2007). Experts who offer <a href=\"https:\/\/www.edudorm.com\/edudorm-services\/case-study-services\/case-study-management\/management-case-study-help\">management case study help<\/a> at Edudorm essay writing service indicates that third, Limited Liability Company does not have a case law which may protect the business in case of any liability from business practices. Other problem with Limited Liability Company arises from taxation where the business can pay a high amount of tax as a result of business models, business nature and personal income.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Advantages and disadvantages of changing the company organization from a sole proprietorship to a corporation<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Advantages<\/h3>\n\n\n\n<p>The McGee Cake Company may enjoy benefits from a <a href=\"https:\/\/www.investopedia.com\/articles\/personal-finance\/011216\/llc-vs-incorporation-inc-which-should-i-choose.asp\">corporation<\/a> since this is a legal entity business under state laws and its shareholders are not liable for business debt and personal assets are protected from debts. Corporation has a higher amount of starting capital as it can get money from selling shares and stock markets compared to Limited Liability Company and sole proprietorship (Mancuso, 2009). Authors who offer <a href=\"https:\/\/www.edudorm.com\/edudorm-services\/assignment-services\/management\/operations-management-assignment-help\">operations management assignment help<\/a> at Edudorm essay writing service points that there is an easy transfer of ownership as the owner is issued with share certificates. Corporate business has a perpetual existence and this indicates that there is no life limit since the\u00a0change and death of ownership does not affect the business. Since the business is a single-entity, it has no tax liabilities and the business pays taxes from personal tax return.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Disadvantages<\/h3>\n\n\n\n<p>\u00a0 \u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0\u00a0 Corporate business requires a high cost for running the business.\u00a0There is a complex process from the regularity authority which demands the completion of certain requirements. For example, the incorporation paperwork requires the business to high an accountant which may need a high cost for completion (Mancuso, 2009).\u00a0Tutors who offer <a href=\"https:\/\/www.edudorm.com\/edudorm-services\/assignment-services\/management\/project-management-assignment-help\">project management assignment help<\/a> at Edudorm essay writing service acknowledges that secondly,\u00a0a corporate business meets challenges from agency problems. Since\u00a0corporation shareholders assign functions to board of directors who then hire managers, the problem arises when then hired managers perform their roles with own interest rather than corporation interest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Recommendations<\/h2>\n\n\n\n<p>I would recommend that McGee Cake Company should change the business to corporation rather than to a Limited Liability Company since this is the best decision. This is because, the company has already gained a reputation and there is a high demand for the product and therefore corporation will help the company to reach the potential customers since it will live forever (Mancuso, 2009). Corporation will encourage the members to invest their money and buy stocks\u00a0in order to meet the global demand and gain competitive advantage. Mentors who offer <a href=\"https:\/\/www.edudorm.com\/edudorm-services\/case-study-services\/case-study-management\/organization-behavior-case-study-help\">organization behavior case study help<\/a> at Edudorm essay writing service recognizes that it is important to note that a legal business structure with legal entity with have a limited liability and it is easy to transfer the business with credibility with respect to the law. In addition, the company will enjoy benefits from tax gain such as health insurance premiums and life insurance (Mancuso, 2009). In comparison to a Limited Liability Company, corporation will help the company to establisha professional identity which will increase credibility and prove legitimacy to global customers.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">References<\/h3>\n\n\n\n<p>Mancuso, A. (2009). <em>Incorporate your business<\/em>. Berkeley, CA: Nolo.<\/p>\n\n\n\n<p>Warda, M. (2007). <em>The LLC and corporation start-up guide<\/em>. Naperville, Ill: Sphinx Pub.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Advantages of a Limited Liability Company The McGee Cake Company may enjoy benefits from a Limited Liability Company (LLC) as it does not have a legal responsibility and this means that members cannot be held liable for company\u2019s debt. In addition, Limited Liability Company enjoys profit through taxation in that taxes are straightforward or in [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2990,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[1079],"class_list":["post-2989","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-analysis","tag-limited-liability-company"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Limited Liability Company - EDUDORM FREE ESSAYS<\/title>\n<meta name=\"description\" content=\"The McGee Cake Company may enjoy benefits from a Limited Liability Company (LLC) as it does not.... 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