Limited Liabilty Partnership Essay Example | Topics and Well Written Essays - 2000 words

Limited Liabilty Partnership - Essay ExampleThese businesses atomic number 18 the most common and simplest ones since they just have one owner who runs the business by himself and is self employed. These casings of businesses ar east to start since they do non require much, if not any, legal obligations, and paperwork.It is important to note that the bushel monger assumes the all the responsibility of the business. This includes looking after all the operations, issues, debts, loans and others. The problem with this business is that the sole dealer has unlimited liability for the business and in case of bankruptcy, the sole trader would have to pay up wrap up the debts and claims from his pocket or by selling off the phoners assets and the sole traders assets as well (Hicks & Goo, pp. 13-18). Important here to note that the law does not provide the sole traders company, the status of a separate legal entity which other forms of business enjoy having. These businesses do not have the option of equity financing or in simple words issuing bonds and stocks for nip and tuck capital. Moreover, if the sole trader goes for debt financing, even then, the loan would be on his name and not on the companys name and he, not the company, would be liable for paying off the loan (Mancuso, pp. 65-69).The second type of business would be of partnerships where two or more partners jointly start their business and assign the responsibilities and self-will of the business. Unlike sole proprietor where only one person is responsible for everything, in partnerships, all the partners share the responsibility of running the business. However, their liability remains unlimited. This is because of the fact that partners are liable for any decision whether taken by him or any other partner. Moreover, if one partner runs away than the rest would have to pay his or her debts liabilities from their pockets (Martin, pp. 41-49). These types of businesses are easy to form and easy to dissolve as