Business Studies

Advantages and Disadvantages of Limited Liability Company

len Alfred Ajibola - 13th June, 2022 @ 03:17 PM

Topics in Business Studies

What is an Office? Qualities of a good office layout Small office explained with its characteristics Large office: Characteristics of large office Advantages and disadvantages of small office Advantages and disadvantages of large office Advantages and Disadvantages of Corporations Advantages and Disadvantages of Limited Liability Company Advantages and Disadvantages of Partnership Credit card and Debit card explained with their similarities and differences Business Structure: What is a business structure? Advantages and Disadvantages of Franchise What is a franchise? Types of franchise Corporation explained with its types What is Limited Liability Company? What is Partnership Business? Types of Partnership What is business studies? Concept of business Elements of Management What is Management? Importance of Management Advantages and Disadvantages of Air Transport Advantages and Disadvantages of Rail Transport

Academic Questions in Business Studies

Please click here to see all Questions and Answers

A one-man business is termed _____.

  • A. Proprietorship

  • B. Sole Proprietorship

  • C. Individual Entrepreneurship

  • D. Sole Trader

  • E. All of the Above

  • F. None of the Above

Which of the following is not a function of the wholesaler?

  • A. They distribute goods

  • B. They store goods

  • C. Specialization of goods

  • D. They bring about price variability in goods

  • E. They act as shock absorbers during the movement of goods

  • F. Packaging of goods

A person employed by an organization to carry out the everyday duties of a typical office, and at the same time perform a couple of other functions for their company which may vary from one company to another, is termed a _____.

  • A. Secretary

  • B. Personal Assistant (P.A)

  • C. Secretary General

  • D. Clerical Staff

  • E. Supervisor

  • F. Bookkeeper

Dual Entry System - Len Academy

The above image best describes the _____.

  • A. Ledger system

  • B. Journal system

  • C. Double entry system

  • D. Balance sheet system

  • E. Principles of accounting system

  • F. Balanced accounting system

An accounting system focused primarily on a balanced debit and credit side is termed _____.

  • A. Ledger system

  • B. Journal system

  • C. Double entry system

  • D. Balance sheet system

  • E. Principle of accounting system

  • F. Balanced accounting system

With regards to money, which of the following statement is incorrect?

  • A. Money is crucial for the survival of every human being

  • B. Money is completely advantageous

  • C. Money is defined as anything that is generally accepted as a medium of exchange

  • D. Monopoly is said to exist when money and wealth exists in the hands of a few

  • E. Excess money in an economy can lead to inflation

  • F. When a person receives money that isn't commensurate with the job he or she had done, then that's underemployment

Which of the following statement is wrong with regards to business?

  • A. Business involves the exchange of something for another thing or money

  • B. Business is an economic activity

  • C. In business, profit goes beyond money

  • D. Businesses do not have social responsibilities to their customers

  • E. The exchange of services is an aspect of business

  • F. Businesses can be affected by government policies

Consumer _____ are the laws and methods put in place by various agencies so that consumers can enjoy maximum satisfaction on the goods they buy and services rendered to them.

  • A. Protection
  • B. Policy
  • C. Rights
  • D. Defence
  • E. Guide
  • F. Safety

Limited Liability Company (LLC):

The Limited Liability Company (LLC) is a type of business structure. It is defined as a private company owned by an individual or a group of people who have reached a legal agreement with each responsible for its debts only to the extent of the amount invested as capital into the company.

Please the introduction and concept of limited liability company here.


Advantages of Limited Liability Company

  1. The members of a limited liability company are not personally responsible for the LLC's debts, thus protecting their assets in the process of a lawsuit.

  2. The limited liability company's profits are only taxed once since each member pay directly alongside their tax. This process of of being taxed once is known as pass-through taxation.
    Please read on the concept of a business structure here.

  3. There is a limited liability (limited financial burden) on the part of the investor since it's limited to each person's investment.

  4. There is freedom in management since there isn't a need for board of directors (BoD) and frequent meetings.

  5. Loans can be easily accessible through a limited liability company.

  6. There is no limit to the number of individuals involved in a limited liability company.
    You can read on partnerships here.

  7. Compared to corporation, the limited liability company is quite simple to establish. A single member can even form a LLC.

  8. As a business structure, the limited liability company is more credible than the sole proprietorship and partnership. For this reason, it is recognized as a more formal business structure.

Please read on the sole proprietorship, its advantages and disadvantages here.


Disdvantages of Limited Liability Company

  1. It can be capital intensive.
    You can read on scale of preference and opportunity cost here.

  2. Tax fee may be higher.

  3. Depending on the country, there may be strict government laws guiding the limited liability company.

  4. Cheques made into a limited liability company cannot be cashed directly.
    Please read more on cheques here.

  5. The members of a limited liability company must have separate records for their LLC business and other businesses which they run alongside the LLC. In short, money generated from other businesses must be kept separate from the LLC's account.

  6. The members of a limited liability company must wait until they receive the schedule K-1 form in order to complete their personal taxes.

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Amazing facts in Business Studies

The world's 100 richest people earned enough money in 2012 to end global poverty four times over

Notable points in Business Studies

Consumer protection refers to the ways or methods through which consumers enjoy maximum satisfaction from the goods they buy and services rendered to them.

The agencies of consumer protection assists in protecting the consumer rights. These agencies may also be referred to as the organs of consumer protection. Basically, we have three of them, they are:

  1. Government Agencies

  2. Independent Agencies

  3. Legislation

Please read on consumer protection here

One of the responsibilities of the government of every nation is to set up agencies or organizations that will protect the interest of the consumers and invariably, the people.

Below are some of the government agencies of consumer protection:

  • National Drug Law Enforcement Agency (NDLEA)
  • National Agency for Food, Drug Administration and Control (NAFDAC)
  • Consumer Protection Council (CPC)
  • Rent Tribunal
  • Ministry of Health
  • Ministry of Commerce
  • Ministry of Transportation
  • Ministry of Environment
  • National Wages and Salaries Commission

Please read on the government agencies of consumer protection here