Posted: February 17th, 2022
A limited liability business organization is a type of business that protects its owners from personal responsibilities for its liabilities and debts. Limited liability companies are beneficial because they enable pass-through taxation and have no restrictions on the maximum number of members it can allow within its setup. This is beneficial in ensuring a flexible structure to meet the desired goals and targets (Cappellino, 2020, 4). An example of a limited liability company is Hilton Hotels. More so, limited liability companies protect their owners from liabilities and debts. Hence, making its structure attractive. However, this type of business is expensive to form compared to partnerships and sole trader ships. The high turnover rates also discourage banks from issuing such companies’ loans, making it difficult to access specific funding and financial assistance. There are two types of limited liability business organizations: private limited and public limited companies. In a private limited company, members are limited to fifty, and the transfer of shares is also restricted. On the other hand, a public limited company has no restrictions on the transfer of shares or the number of members.
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