characteristics of a 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 companies , this in order to minimize the responsibility they have with the contributed capital, and thus not respond to debts of business to your personal assets.
In other words, the limited liability company is delimited by what the partners have contributed , being divided into shares, unlike public limited companies 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 characteristics does a limited liability company have?
This type of commercial 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 a sole proprietor , this 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 commercial company, the partners 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 results are distributed. It can be called in an extraordinary way or in an ordinary way, this by the partners who have a representation of 5% of the capital .
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.
Advantage of the limited liability company
For small businesses this type of company can be useful. Since with 3,000 euros you can start up , which does not happen with a public limited company , where 60,000 euros are needed. giving you an edge 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, these types of companies have greater ease in opting for a bank loan , because banks have more information and being a company gives a better image.
Disadvantages of the limited liability company
Although a limited liability company brings a variety of benefits to our businesses, it 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 complicated to specify in these companies , accounting is mandatory, and transferring shares is restricted, unless who acquires it, is a direct relative of the transferor.
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 you have a business with few partners. In addition, you have the advantages and disadvantages for you to analyze about this commercial company.