The profitability and losses of the company are

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limited liability company. The profitability and losses of the company are reported in personal income tax of the company just how it is reported by the owners in partnership (Bizfilings, 2012). There are certain issues that should be taken care of when starting or filing for the LLC. The name should meet the legal obligations. Secondly, it is important to file for the articles of organization which provides legal consideration to the limited liability company that one wants to operate and include all the information that is important for the registration of the business. The third step is that an operating agreement should be created which is not mandatory but suggested so that all the financial terms and conditions are stated in the agreements which ensure the smooth transition of the business operations. The fourth step is that once the business is registered the license and business permit must be attained from the authorities. The employees must then be hired according to the regulations. Last but not the least, it can be considered important to announce the launch of the business operations through the newspaper. It is important to note that the limited liability company is not considered a separate entity to tax, which means that the business itself is not taxed. Instead, all the income taxes are paid by the LLC shareholders through their own income taxes (Bizfilings, 2012). The advantages and disadvantages of limited liability company are discussed below:
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FORMS OF BUSINESS ORGANIZATION 10 First and foremost, the members of the limited liability company are saved from the personal liability for business decisions or actions of the company. This means that unlike the partnership and sole ownership, if the limited liability company is indebted and is sued, the personal assets of any member are not affected. This is similar to how the personal assets of members of the corporation are protected. Another major advantage of limited liability company is that it can be operated with extreme operational ease. When we compared it with S- Corporation, the registration and business permit grant paperwork is considerably less and the business start-up cost is also less in comparison to others. The third advantage is that there is no restriction as to how the profits must be distributed and the members can distribute the profits as they feel it is right. It is also important to note that these members can contribute capital and their equity which will eventually decide the proportion of losses and profits that must be shared among the members (Bizfilings, 2012). The disadvantage of operating a limited liability company is that in many places when a member leaves the company, the business is dissolved and it is deemed important that the members fulfil all the obligations including debts and loans before closing the business operations. Then the remaining members decide if they want to start a new company or not, however, if the members want, they can add provisions in the agreement initially as to how to solve the condition when a member leaves the company (Bizfilings, 2012).
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