Limited Liability Corporations: Advantages and Disadvantages

Limited Liability Corporations: Advantages and Disadvantages INTRODUCTION Definition of a limited liability corporation (LLC) This paper will first commence by giving the exact meaning of a limited liability corporation. A limited liability corporation (LLC) is the usual incorrect name used instead of a limited liability company. Therefore the limited liability company and the limited liability company both refer to the same thing. Following the clarification made above it is therefore correct to say that a limited liability company (corporation) is a legally known business institution that gives a limited type of liability to its members (owners). It must be remembered that the limited liability corporation as it is known is not a corporation but is also a kind of association that is unincorporated. The only existing feature that is similar between a limited liability corporation (company) and a corporation is that both have or give their owners limited liabilities. The LLC bears the flexibility advantage over the normal corporation. In order to further simplify the definition of an LLC; it is a business entity that has both the qualities of a partnership type of business and a corporation (Mancuso, 2007). The Internal revenue service authority has realized that the LLC are very popular due to their flexibility. The owners of these LLCs are also known as members and these members could range from individual to corporations, foreign institutions and even other LLCs.the American LLCs have an unlimited number of maximum members. Its also true as regulated by the IRS that certain business institutions cannot be LLCs these institutions include:- Banks Insurance companies Nonprofit organizations History of limited liability corporations (LLC) This type of business has been in existence for a while now and it has been adopted in many parts of the world, this type of business is also protected and bound by law in the many different countries. There operations might be slightly different but the main principles that govern their running remain the same (Shenkman, Weiner Taback, 2003). The different history stories will give a clear a picture of how the LLCs operate in the different countries and their governing principles. This paper will look at the history of LLCs in the United States of America. History of LLCs in the United States of America The LLCs in the United States were as a result of inspirations from a German business organization, the business organization is known as the GmbH.The American LLCs also got their inspirations from the business model of many Latin American countries also known as the Lamitadas (Wood, 2000). The history of the LLCs in America is quiet interesting with the LLCs making their first appearance in the year 1977 in a state called the Wyoming. The Wyoming state had come up with a Limited liability Company act for an oil company, three years later there was a ruling by the Internal Revenue Service (IRS) and a private letter was issued to the LLC Company that was formed under the Wyoming LLC act. The letter had stated that the IRS would treat the LLC under the Wyoming LLC act as a partnership for the purposes of Federal Tax (Humphreys, 1998). The IRS would later propose legislations that would deny all business enterprises (that had owners whose liabilities were limited) the partnership classification, further complicating matters for the LLCs. Many American states introduced the LLC act in the year 1988 due to the uncertainties that were arising due to the tax issue that were facing the LLCs. This is because the IRS in that year did pass a revenue ruling that finally accepted the Wyoming type of LLC companies formed under the Wyoming LLC act as partnerships for tax related purposes. Every state had installed an LLC act by the year 1996 and in that same year a body called the National Conference of Commissioners on Uniform State Laws worked to adopt the Uniform Limited Liability Company act. This act was then revised in the year 2006. Facts about taxation of LLCS There are a few facts about the Taxation of LLCs that must be noted, these facts include the regulation and guide lines that have been issued by the IRS to give direction on the system of taxation for the LLC owners. The guidelines also highlight the type of tax returns to be filed and how to file the tax returns. The following are some of the guidelines given by the IRS For single owned LLCs For the purposes of filing a federal tax return, it is a common practice by the IRS to ignore the fact that the business entity is an LLC. This step is only meant for the taxation process and the business entity is still legally recognized as an LLC. There are two categories of reporting the income and expenses. The first category is for those LLCs that are owned by individuals and the IRS expects the LLCs income and expense to be reported on the form 1040, schedule C, E or F. In situations where the only member of the LLC is a corporation then the LLCs income and expenses must be reported on the corporations return which is form 1120 or 1120S (www.irs.gov) Taxation for LLCs with multiple owners These types of LLCs usually file a partnership return which is done in the form 1065 (www.irs.gov) Employment taxes All LLCs must meet their employment tax requirements as stipulated by the IRS, it is therefore a fact that all the LLC employees are subject to withholding tax. The LLCs must also file form W-2 and form 1099 upon request. The issue of self employment is also captured by the IRS and it is a requirement that the LLCs must file the schedules C or F where the owners are subject to self employment taxes on their earnings. In situations where the LLCs file for the partnership returns then the members must pay taxes on their share of partnership earnings (www.irs.gov) There is a special rule that applies in a situation where the LLC has operating losses, and this rule also limits the amount of deductions because of the owners Limited liabilities for the LLC debts. Advantages of an LLC Tax flexibility The LLCs usually enjoy a degree or room to choose in what category to be taxed i.e. the LLCs can either choose to be taxed as a sole proprietor, corporation or even as partnerships. The owners liabilities are limited Depending on the legislation of a given country the owners usually enjoy a degree of protection against Liability for the debts of the LLC, this would depend on the laws that govern the LLC in that particular country. Reduced Administrative Work The LLCs usually enjoy a much more reduced level of paper work and also administrative works compared to the corporations meaning that they would incur less costs by reducing their administrative works. No double taxation The LLCs are normally taxed once unless they choose otherwise for example if they decide to be taxed as the(C) corporations No taxation at LLC level According to the tax category in which the LLCs are placed they are usually only taxed from the individual level, this means that the owners of the LLCS are the ones who are taxed but the LLCS are not taxed as the company. Separate entity Some laws to provide or state that the LLCs are different entities from the individuals, hence if an individual or owner is affected in any way by the law then this does not affect the company or if the company is involved in a legal suit then this does not affect the owners of the company. According to Shenkman, Weiner and Taback (2003), the other advantage of the LLCs is that the owners can usually retain the gains of the company as capital gains or even better as income that is foreign sourced meaning that the LLC is able to maintain the character of its income this only happens in cases where the LLC has chosen not to be taxed as a corporation. Easy setting up of the LLC It is quiet possible to set up the LLC in some states of America because it only requires one person to be involved (physically). Assigning of membership interests When it comes to the LLCs it is possible to assign the membership interests; the economic advantage brought about by the interests can be separated and even assigned, this gives the assignee the benefits that result from distribution. These listed advantages that are enjoyed by the owners are most appreciated and the owners are keen to work within the confines of the Law. The owners have particularly been keen on the tax flexibility of the LLCs as stipulated by most laws, thus the owners can enjoy a far much reduced burden of taxes that are levied thus they enjoy significant profit margins (www.irs.gov). The fact that most laws recognize the LLCs as separate entities it is easy for the owners not to be victimized incase of a Legal tussle between the company and any other entity. With proper and strategic utilization of the advantages the owners can be able to maximize their business potential and have a competitive advantage in the business market. The disadvantages of LLCs Lack of definite title of authority One of the major challenges facing the LLC is the fact that the LLC as a business entity lacks a definite title of the designated authority that can enter into an agreement or a contract on the behalf of the LLC for example the title used by LLC include President, Chief executive officer, partner and managing director. Threat of being treated as a disregarded entity Since the LLCs are a new a concept and the many states apparently do not really recognize the LLCs but instead view them as sole proprietorship incases where it is owned by an individual or as partnership incases where it is run by a group. This means that the LLCs lose the advantage and instead their liabilities become unlimited. The third disadvantage is that in a situation where the LLC is outside the American jurisdiction then there is a greater possibility for the LLC to be treated as a corporate therefore stripping it of the advantages it enjoys as the LLC. The fact that the LLCs structures not properly understood by many is a clear indicator that its reception is also limited among the greater public. The LLC also does not have a board of Directors. In some situations where the LLCs are just starting the members are usually required by creditors to personally guarantee the loans on the behalf of the company, this directly implies that the members or owners become directly liable for the debts incurred by the company. Difficulty in raising capital This may occur due to the fact that the general operating structure of the LLCs is not understood well by the investors; hence they are more relaxed to invest their money simply because they do not have the hopes of making profits through the Initial public offer (Mancuso, 2007). There is also a possibility of the owners of the LLC getting into trouble for not having an operating agreement; this is possible mainly due to the fact that there is no legal requiring for the members to have one. How the disadvantages affect the company Some of the above disadvantages greatly affect the company, starting by the increased inability to raise capital; when this occurs or when a company is unable to attract the required number if investors to help it raise capital the operation costs of the company become difficult to meet, secondly without the optimum amount of capital the company becomes unable to meet optimally its set out objectives and it then even becomes difficult for this particular company to even expand. The lack of a definite title authority to enter into agreement might make the potential business partners to enter into any binding business agreement for fear of losing out by either entering into an agreement with a company representative who does not have the authority to legally enter into a binding agreement, meaning the company might lose out on many business opportunities (Humphreys, 1998). The issue of jurisdiction and taxation issues might be unfair to the company and in turn hurt the company profits in the long run, this is mainly because of the fact that the US LLCs might be considered as corporate for tax purposes which should not be the case thus they will lose more revenue through the taxes levied on them. Another thing that could really hurt the company is the fact that some creditors demanding that the owners guarantee loans that have been taken for the LLC,this not only strips the owners of their right to limited liabilities but also limits the capacity or the amount of credit that can be taken for the LLC for one simple reason and that is the fact that the individuals might have a limited capacity to guarantee the loans compared to if the LLC took the loan as separate entity (Humphreys, 1998). The fact that the LLCs are not really recognized in many states and that incase of an individual the LLC is only recognized as a sole proprietorship does actually limit its extent of operations and also exposes it to liabilities that face the sole proprietorship as a business entity. Operational tax issues At the state level The operational tax issues might not have guidance at the state level simply because different states do have there different laws and guidelines event though the laws are harmonized there are those states that would differently treat the issue of operational tax. Self Employment There are two aspects to this operation tax. The first aspect is the LLCs category of filing namely C and F This mostly requires that the members file their self employment taxes on their earning. The filing of partnership returns Here there is a general requirement that the owners must pay tax from their share of partnership earnings. Passive activity This usually limits the owners or members on the amount of loss that they are able to deduct References Cody, T., Hopkins, D.A., Perlman, L.A. (2007). Guide to Limited Liability Companies. (9th ed.). Boston: CCH. Humphreys, T.A. (1998). Limited liability companies. Sydney: Law Journal Press. Mancuso, A. (2007). Form Your Own Limited Liability Company. (5th ed.). Edinburgh: Nolo. Mancuso, A. (2007). Your Limited Liability Company: An Operating Manual. (5th ed.). Edinburgh: Nolo. Shenkman, M.M., Weiner, S., Taback, I. (2003). Starting a Limited Liability Company. (2nd ed.). New York: John Wiley and Sons. â€Å"The American Recovery and Reinvestment Act of 2009: Information Center.† Retrieved August 24, 2009 from http://www.irs.gov/newsroom/article/0,,id=204335,00.html?portlet=6 Wood, R.W. (2000). Limited liability companies: formation, operation, and conversion. (2nd ed.). Atlanta: Aspen Publishers Online.

Moving a Website

Reggie A. Conner Professor Stan Buch CIS 210 Term Paper 09/09/2012 Abstract In this paper I will assume a new company has hired me to manage a project that will move the old Website from an externally hosted solution to an internal one. The company’s leadership is very concerned about redundancy for their site, insisting that a back-up site be available as a failover in case the main site goes down. In addition, they want the site redesigned to allow customers to order products online.As part of my job, I must complete a 10-to-15 page paper that follows this project through the system development life cycle (SDLC). This assignment will require I to do the following: * Discuss what it will take to build a Web architecture, move an existing Website with minimal downtime, and provide a disaster recovery solution to ensure the site is always available. * * The Web architecture should describe and justify operating system choices (i. e. , Linux, Apache, MYSQL, PHP, Windows, IIS, SQ L, etc. ). Evaluate alternatives to the company self-hosting the site. * Build a Gantt chart using Microsoft Project or equivalent software, showing all tasks associated with implementing the Website. * The chart should include a minimum of five (5) tasks, each with three (3) sub-tasks. * Explain and justify the system architecture you have selected. * Illustrate the system architecture using Visio or equivalent software. * Create a use case that documents the event of a customer ordering a bag of chips from the new Website. The use case should include a graphical representation using Visio or equivalent software and a text description of the events. * Discuss the support operations that the internally hosted Website will require after implementation. * Explain how you will evaluate the performance of the new site and the success of your project. Term Paper Whether you are planning to implement a new site or upgrading an existing site to meet growing needs, the following provides gu idelines for meeting the performance and availability demands of today’s online business environment.The mature business site is multi-tiered, with several hardware components, including: †¢ Firewalls and routers †¢ Load balancers †¢ Web servers/front ends †¢ Application servers †¢ Database servers †¢ File servers †¢ Storage hardware The software environment that runs on this hardware can be equally complex, and may include: †¢ Operating system software (i. e. , Linux, Apache, MYSQL, PHP, Windows, IIS, SQL, etc. ) †¢ Web/application server software †¢ Database software and applications †¢ Storage management software (backup/recovery, clustering and failover, etc. Design an architecture that ensures availability. Build redundancy and scalability in your design so the architecture will grow as your business grows. Choose highly available and manageable system platforms. Make sure that the foundation for the various componen ts is as robust as possible, while creating an operating environment in which you can manage constantly. All of the critical components of the site should be built on platforms that optimize the availability and manageability of the total solution.The combined hardware/software platform should keep downtime of all kinds low – including unplanned failures and planned, administrative downtime. Requirements are a high mean time between failures for all hardware components, fast recovery from outages when they do occur, good administrative tools and policies for system maintenance, and support for online administrative activities where possible. Choose solutions that optimize performance regardless of system load, as the site needs to run at peak performance, all the time.Many factors affect site performance, from architecture to application design to processor speeds. Good application design is the most important contributor to performance. After that, processor speed is signifi cant. Building on this groundwork, you can achieve better performance by optimizing I/O and off-loading data-intensive activities from production systems. The business site both hosts and generates a rich array of data that is a critical asset to the business: web content, user profiles, and e-business transaction data.It is critical to protect this data against loss from a variety of potential risks, including disk failure, application or user error, and physical damage due to localized disasters. Highly available storage configurations do not protect data against software or user errors. Recovery from some errors typically require the presence of adequate backups. It is imperative to maintain good backup procedures. The more frequent the backup, the faster the recovery in time of error. Databases have special backup and recovery needs.Oracle databases in particular consist of many files that must be restored appropriately for a database recovery to take place. Although basic backu p and recovery products can work for some Oracle databases, databases of a critical nature or significant size require Oracle-specific backup tools that can support online backups and recoveries, and can handle archived redo logs and other control files appropriately. Whatever tool you use, taking frequent backups, testing recoveries, and cross-training DBAs are all crucial to effective Oracle administration.Be sure to protect the applications. Site availability depends on the availability of many components. You must take an application-level view of availability and protect all of the components required to deliver online services to your customers. The best approach for this is clustering software that leverages the hardware redundancy you built into your site to provide sophisticated failover at an application level. There are different approaches to clustering, depending on whether or not the various nodes of the cluster will access the same data at the same time.Be sure to alw ays plan for change. Change is the one apparent constant in the Internet economy. Your site infrastructure must be able to adapt to change rapidly as you add new services or change strategies – providing fast time-to-market with reliable site performance. Evaluate alternatives to the company self-hosting the site. Alternatives to self hosting sites are web based hosting. Web hosting is the ability to move a business or information, product content, and research to the Internet.Actually, web hosting service is an Internet hosting service that permits an individual or an organization to provide their websites accessible via World Wide Web. Web hosts are those firms or organizations that provide space on a server they own for use by their clients as well as providing Internet connectivity, typically in a data center. These also furnish data center space and connectivity to the Internet for servers they do not own to be located in their data center. Create a use case that documen ts the event of a customer ordering a bag of chips from the new Website.A proposed system is shop online. The application provides the online shopping facility available to everyone. Any type of the product will be available for the customer. In this case a bag of chips. Shop online concentrates more on user friendly interfaces and promotes users to make purchases faster, and easier. In the User interface of Shop online there will be accomplished purchases with options to find new products available, most purchased, and customer satisfied products. All products in the website will be highlighted with the image of the product.By clicking on the image, it will take you directly to the buy page, where the customer can purchase easily. Shop online is also provided with a customer support page. Using this page a customer can get assistance from the available CSR online. As security issues pay a major importance of online shopping, extra attention is applied to security. A digital signatu re is incorporated to ensure protection for the customer. Discuss the support operations that the internally hosted Website will require after implementation.Explain how you will evaluate the performance of the new site and the success of your project. Manage Application Service Requests (application problem resolution, functionality, new structures). 1 Document 2 Prioritize 3 Execute 4 Collaborate with operations 5 Help Desk Application Monitoring & Maintenance 1 Schedule and monitor automated processes. Application Patching (including testing) †¢ Internal controls set up and monitoring Database Monitoring & Maintenance Interface Maintenance 1

The Awareness Of Children s Perception Of Disabilities...

Nowadays, with the development of people’s perception of disabilities, the avoidance of this topic is on the decrease. Less and less parents are not eager to deny that their children could possibly have some kinds of disability when they were suggested to take a test by educator. In fact, more and more of them initiatively took their kids to the test center when they somehow realized their children might show a sign of any types of disabilities or did not achieve certain goals during their growing. We have learned various area of disabilities and the resources of helping people with disabilities. Advanced science and technology has made assistance by professional in special field the inevitable result of the social development and an essential part of the structure in modern society. Therefore, not only public support facilities and also the appropriate special education program shall arouse close public concern. For majority people with disabilities one of the most indispensable life experience is to enter the mainstream of society and realize one’s personal value, which promote the statues of positive spirit. The purpose of this essay is to illustrated how I have gain a deeper understanding of people with disabilities by interviewing Mr. Franco and doing research. For reaching the goals of look into the life of living with family members with disabilities, I interviewed Mr. Franco, who is a guardian of 17-year-old boy Miguel who has a dead/hard of hearing which is aShow MoreRelatedPhysically Challenged6701 Words   |  27 Pageshandicapped (ii) Mentally ill. The condition of disability may arise by birth or in accident. Polio, blindness, deafness, dumbness and mental illness may occur by birth or by other incidents or due to ill health. Handicappedness is measured by medical persons in various degrees while they give certificate to the handicapped person. 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