Questions 177-180 refer to the following
passage. A limited liability company is the newest
form of business organization; gaining popularity in recent years A limited
liability company (LL(C) is a type of business ownership combining several
features of corporation and-partnership structures But every coin has two sides
LLC also have advantages and disadvantages. Advantages: Limited liability: Owners of an LLC have the
liability protection of a corporation Members cannot be held personally liable
for debts unless they have signed a personal guarantee.
Flexible profit distribution; Limited liability companies can select varying
forms of distribution of profits. No minutes: the LLC business
structure requires no corporate minutes or resolutions and is easier to
operate. Flow through taxation: All the business losses,
profits and expenses flow through the company to the individual members People
avoid the double taxation of paying corporate tax and individual tax. Disadvantages: Limited life: Corporations can
live forever, whereas an LLC is dissolved when a member dies or undergoes
bankruptcy. Going public: Business owners with plans to take
their company public, or issuing employee shares in the future, may be the best
served by choosing a corporate business structure. Added
complexity: running a sole-proprietorship or partnership will have less
paperwork and complexity. An LLC may be classified as a sole-proprietorship,
partnership, or corporation for tax purposes Classification can be selected or a
default may apply. What is the passage mainly about
A. The structures of the limited liability company
B. The finance of the limited liability company
C. The merits and demerits of the limited liability company
D. The cooperation of the limited liability company