Limited Company (LC)
Categories: Incorporation
Like when you get to the VIP room of VIP rooms, where the only people allowed in are LeBron James, Tom Cruise, and Jennifer Aniston. Limited company.
Also, the term represents a distinction in corporate law. Basically, forming an LC protects owners from runaway losses. You invest $50,000 in an LC. The company goes bankrupt. You lose your $50,000, but the firm's creditors can't sue for your house or other personal assets. You can only lose what you put in.
The specific aspects of an LC change from country to country and jurisdiction to jurisdiction. In the U.S., we're talking about corporations: companies ending in Inc., Corp., or Ltd.
An LC differs from a Limited Liability Company, or LLC. The distinctions largely come from how they are taxed. Limited companies (like "C" corporations) are taxed as separate entities for U.S. federal taxes. For LLCs, these taxes take place on the individual level...the company doesn't pay a tax, just the owners.
See: Limited Liability Company - LLC.
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Finance: What is an LLC?4 Views
finance a la shmoop. what is an LLC? LLC no that's not a rapper, that's a limited
liability company or look as professionals in the business pronounce
it. well why do you want one? because limiting your liability is a [man explains]
good thing if you're the one potentially liable for that stooge who slips on a
banana peel in your lobby waiting area and then Sue's you and wins. if you start
building your own company as an individual and not as an LLC and you get
sued for whatever, and you lose well you could lose everything you own.
that is the lawyers will come after your house your car your poodle your signed
Mila Kunis photograph collection, and legally well they'll be entitled to take
all of it. if you have existed under the legal structure of an LLC however, well [legal structures pictured]
the most you can be liable for is the assets of the business itself. yes
they'll take the company computer the remaining 17 months of lease on the
company building, and all your staplers and posted thingies but legally they
won't be able to go after your home your car your poodle or your autograph
collection. Mila is safe whew. so LLC's are a good thing they cost only a few
hundred bucks to set up these days, hi LegalZoom. so before you start up a lava
lamp company of your own think about setting up an LLC first. Mila and your [lava lamps in a row]
poodle gregory will thank you for it.