- 1 What are the characteristics of a limited liability company?
- 2 What are the advantages and disadvantages of the limited liability company?
Today we will talk about what are the characteristics of a society of responsibility. Before we know what is a Limited Liability Company? Also known as Limited Company, it is a type of commercial company, which is quite common, it is normally used by small businesses, this in order to minimize the responsibility they have with the contributed capital, and thus not respond to business debts to their personal assets.
In other words, the limited liability company is delimited by what the partners have contributed, being divided into shares, unlike corporations that are divided by shares. In this article we will also mention and explain below, the characteristics of the limited liability company and its advantages.
What are the characteristics of a limited liability company?
This type of trading company is common thanks to its characteristics and flexible regulation. Next, we will see a variety of characteristics of the liability company.
Number of partners and their responsibility
You can have a minimum of one being sole proprietorshipThis in case of not having more partners, and there is no existence of any limit. The responsibility of the partners is jointly and severally, having in a limited way the capital that they contribute, that without contributing debts with the personal patrimony.
Types of partners
In this type of company, the partners they can be working partners or capitalist partners. A working partner is a person, who has a fundamental role in the ownership and creation of the company. On the other hand, the capitalist partner is a person who can be physical or legal, who participates in the stock of a society or a company, collaborating with increasing the capital by investing money or some good.
Has a general meeting of partners
In the limited liability company, this is the largest decision-making body. It is called between the first half of the year by the administrators. Here the management that has been carried out is presented, the accounts for the year are approved and the resulting distribution is distributed. It can be called in an extraordinary way or in an ordinary way, this by partners who have a representation of 5% of the capital.
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What are the advantages and disadvantages of the limited liability company?
We have already seen some of the characteristics that the limited liability company has, now we will explain some of the advantages and disadvantages that it has.
Limited Liability Company Advantage
For small businesses this type of company can be useful. Given that with 3,000 euros you can start, which it’s does not happen with a corporation, where 60,000 euros are needed. giving you an advantage between the limited liability company and the corporation. It is easy in terms of procedures in its operation and its constitution, the number of partners can be only one, being sole proprietorship.
And finally, this type of company have an easier time opting for a bank loan, because banks have more information and being a society gives a better image.
Disadvantages of the limited liability company
Although a limited liability company brings a variety of benefits to our businesses, has some disadvantages, which we must take into account when we are making our business strategy.
Among some of the disadvantages it has is: There is no guarantee that the owners are protected from personal liabilities, their taxes are difficult to specify in these companies, accounting is mandatory, and transferring shares is restricted, unless the person who acquires it is a direct relative of the transferor.
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We hope this information about a limited liability company has been useful to you, which you can aspire to if you plan to start a company, or have a business with few partners. In addition, you have the advantages and disadvantages for you to analyze about this commercial company.
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