What is the purpose of a Limited Liability Company
The main aim of an LLC is to distribute their income to the partners, as well as permit the shareholders and directors of the company. This to protect business owners from personal liabilities in the event that the business makes a loss.
If the business operates in a loss, the business owners establish a separate independent corporation that assumes the entire liability of the incurred loss or debts of the company.
According to the rules of LLC, an individual is never responsible for the firm’s debts as long as he/she did not invest a personal property or secure them personally, like in a case with a second mortgage.
What are the Advantages of a Limited Liability Company?
The limited liability company has significant tax benefits over the sole proprietorship and partnerships. This includes compensation in the form of the distribution of profits that are in turn taxed at an individual level. Corporations are also taxed at very favorable rate. There are also various incentives and schemes that reduce the final amount due. Thus, the taxation rate of Limited Liability Company is relatively lower than that of the sole proprietor.
LLCs can be wholly foreign owned, and the process of incorporation can be done online. This process is made easy by Inland Revenue Department, and a technologically savvy nation.
This will provide a separate entity from the owners of the business. This means that the owner is not personally liable for the finances of the business, and that banks and financial institutions will be more likely to loan money to the private limited company. The owners’’ personal property is also not at stake over a company’s debt.
At Paul Hype Page, we are well versed in corporate tax planning and can help ensure you make full use of the various rebates for businesses, to ensure you do not overpay for your taxes. This includes knowledge on existing Double Tax Avoidance agreements in the region and around the world, for wherever you decide to expand your business.