How to Start a Limited Liability Company
In this article find out why a limited liability company is better over to a partnership and why you should learn all you can about it!
Are you interested in starting up a limited liability company? The model of the limited liability company is one of the best in the recent years and its one of the most popular as well.
The main understanding of the limited liability company is that the company’s finances are essentially separate form the owners assets. Shareholders are enlisted into the company’s formation and they may belong to the same company or other companies. If you are a shareholder of a limited liability company you are not responsible for the losses of the company if goes bankrupt but you are responsible for the losses of your own money which you invested into the company.
Set-up of a limited liability company
- You have to register it at the requisite company authority with the names of the registered share holders. You may also have to put a notice in the papers. Choose a flexible name which you can adapt to different products.
- According to local rules you have to have at least one director above the age of 16 plus one more if it’s a public limited company.
- Private companies may or may not appoint a company secretary but check with the relevant authorities for a listing of the rules for putting up public limited company.
Management and raising finance decisions of a public limited company
- A director and a board of directors are required for the day-to-day decisions.
- Shareholders can provide the financing or the requisite loans and the retained profits are to be divided according to the financing structure.
- A limited liability company is not allowed to sell shares or parts of the company on the market.
Records and accounts of a limited liability company
- Accounts have to be maintained with the registered company authority with books or a late filing penalty is charged by the registered authority.
- An accounts auditing is necessary every year and result have to be submitted to the entire board for approval.
- Profits are divided on the basis of dividends calculated after the loans installments and working capital is removed.
Tax and National Insurance as payable by a limited liability company
- All profits have to be taxed according to the states requisite laws and an accountant is necessary for the same proceeds.
- Shareholders and company directors or board members are not personally responsible if the company fails or goes in debts.
- Please be aware of the local regulations of each state as they may vary and you will have to follow the same. Hire an attorney to get the process right and prevent any future problems.
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