Posted on October 10, 2010.
Could someone tell me the benefits of an LLC compared to other forms of constitutiona an LLC is a limited liability company. If you have business income or other generate business and are an LLC and make you bankrupt or be sued liability is limited to the assets of the Company rather than the company and your personal property. It's better than a sole proprietor or partnership. For a small company this is an excellent option.
I am not sufficiently familiar with the companies for comment.
Limited liability company.
normal structure of the company. The shareholders are responsible for unpaid share capital if the company is insolvent. Creditors are able to claim the assets of the company and the unpaid capital.
No liability company.
The shareholders are not liable for the unpaid principal
Unlimited company.
Shareholders are jointly and severally liable for the debts of the company.
In this day and age, the ULC is not popular because there is no protection for shareholders if the company goes bust. The NLC has always been rare because of difficulties in starting the collection of debt.
Most investors want to protect their property other than the capital they put at risk investment, therefore they do not like the ULC.
Most lenders want some security for their investment so they do not like the NLC.
The choice of method of incorporation are the promoters, but in reality needs to address the needs to increase both equity and debt. The middle is the LLC.
