What Is Al

Monica Carter

March 31, 2013

BUS 311

Mr. Timory Naples

Assignment #3

Corporations exist mainly to shield shareholders and owners from the liabilities of the company. Corporations pay for this privilege because profits are taxed both at the corporate level and on dividends, according to the Electric Law Library. Partnerships are like the opposite of a corporation. At least one person must be responsible for company debts and litigation, but profits go directly to owners--avoiding the "double taxation." Limited liability corporations offer limited liability protection to owners and members, and profits go directly to the members. Because an LLC is essentially the ideal business structure, many new businesses form as one.

My cousin has started her own business, which is a day spa for little girls between the ages of 3-13, named Lollipop Dreams, LLC. I believe because she is a first time business owner that this was the right move in the direction of maybe becoming a brand. She went to legalizing.com to get all the legal information that she needed to start the business. There are partners, which consist of herself and her husband, he is the silent partner and she runs the business. She says, there was no loans taking from the bank, she received grants for being a first time small business owner and from the military. Employees are young family members that are in high school looking for something creative to do and easy money, this is what we consider to be there first jobs. It looks like she has turned her love for throwing extravagant parties for her daughter into a business.

Advantages of an LLC

Limited Liability: Members are protected from personal liability for business decisions or actions of the LLC. This means that if the LLC incurs debt or is sued, members' personal assets are usually exempt. This is similar to the liability protections afforded to shareholders of a corporation. Keep in mind that limited liability means "limited" liability -...