Question

Although a limitied liability company (LLC) may be the best organization form for most businesses, a significant number of firms may be better off as a corporation or some other form of organization.  

Outline several reasons why a firm might be better off as a corporation than as an LLC. Include one source and must be at least 100 words.

Answer 1

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Intoduction:- A major decision is the form of business organization to be used when starting a business. Yet, as the market grows, it's a choice to be updated regularly. Although professional advice is critical to making this choice, a general knowledge of the available options is also important, a company or an LLC.

A Corporation is better than an LLC because of the following reasons:-

The correct structure or management of a corporation will provide personal liability security for any obligation or liabilities sustained by the business to the owners and investors of the firm.

The investors financial responsibility is usually limited to the amount of money invested in the business.

Most forms for a company to provide substantial tax benefits can be organized. You could reduce taxation on self-employment and increase the number of allowable deductions, which will decrease the taxes you pay on the business income.

For their owners and employees, many corporations structure retirement and tax deferred savings plans that can provide even higher tax savings.

Stock sales for capital raising reasons are often more attractive to investors than other kinds of investment selling.

A business can also sell corporate bonds to raise capital for investment without losing the company's ownership.