I am recommending the business ownership to be establish asa limited company because below I mentioned some of advantages. Limited liability company (LLC) is preferred as for theargument upon below points,* Going concern – comparative to the partnership, LLC Isassuming to have a longer life time in business which is advantageous. * limited liability – in terms of repaying debts in case ofa bankruptcy, LLC is liable only to the initial investment made which isfavorable..
. But partnership owners are personally liable. * Capital gain through share issuing – LLC can issueshares to grab the funding. So, in terms they can start up with lesser initialinvestment.
whereas partnerships have no ability to issue shares, hence will bepersonally collecting funding/capital for the business. * Legal entity – LLC is a legal entity where company isrecognized as a person in front of the law. Thus, will gain government supportas well. But partnership company is not recognized as a separate person inthe eyes of the law…thereby partners must personally witness in front of thelaw. * LLC is managed by a board of directors- so skilled &knowledgeable talent pool can grab for the success of the business with varietyof ideas and suggestions.
But in partnerships. Owners manage in the way theyprefer in decision making. Might in a risk about the business success. * In partnership, a favorable point is that they can havethe fully created profits.
but LLC will not And, below I mentioned some of disadvantages of LimitedCompanies. *Must incorporate with company house – when you incorporateyou will have to file two tax returns for each year one for your own incomeanother for the corporation and you have to maintain lot of paper work withcorporate.it is more expensive work setting up with corporate. *Limited company setting up cost is high- when you are goingto register your company with Company house its taking more costs. *There is more restriction with company name – your company namemust be unique. And it should end up with Limited or Ltd. It should not morethan 60 characters in the name. If you are using any sensitive words or expressionyou must have a permission.
*Accountant cost is high – For the Limited Company they arerecruiting professional accountants because of that the accountant costs ishigh. If Perera & Fernando open their business as PartnershipBusiness type, they can have few advantage and disadvantages as I mentioned inbelow. *Capital – if there are more partners in the company theyhave big Capital but it’s not usable to Perera and Fernando’s restaurant becauseonly two members are working as shareholders.