RESEARCH STRATEGY
1) What is the difference between a limited liability company
and a professional limited liability company?
One of the quickest ways of finding out
more about the two different company forms is to use the define:
feature of Google, as demonstrated above. However, you may find more detailed
information by trying one or more of the following search strategies.
Use the Google search engine (www.google.com)
to compare the results of the following two search queries:
limited liability company
“limited liability company”
The first search query returns roughly ten
times more hits than the second, which has been entered as an exact phrase.
The first search query will search for all
documents featuring all of the words. The second search query limits the
search to documents containing “limited liability company”
as an exact phrase.
Although many of the hits will be identical
for both, typing the phrase in quotation marks ensures that only the most
relevant hits will be returned.
Clicking the Limited Liability
Company 101 link gives you a detailed summary of the term
‘limited liability company’, together with a description of
the advantages and disadvantages of limited liability companies.
The Limited
Liability Company 101 page is part of the about.com
web index, a useful source for quality online information. |
Now try this search query:
“professional limited liability
company”
Use the links provided by the search results
to find the answer to question 1.
Answer
A limited liability company (LLC):
• is a type of business ownership
combining several features of corporation and partnership structures;
• is not a corporation or a partnership;
• may be called a limited liability corporation (the correct
terminology is limited liability company);
• owners are called members not partners or shareholders;
• number of members is unlimited and may be individuals, corporations,
or other LLCs.
Professional limited liability companies
(PLLCs) are similar to LLCs, but are organised for the purpose of
providing professional services (e.g. an accountant, a doctor, or
a lawyer).
|
2) What are the advantages and disadvantages of operating under
these two corporate forms?
Click on the Preferences
link to the right of the Google search button. This will open a page with
a selection of language settings for both the Google interface and the
search returns. Ensure that the interface language is set to English,
so that the Advanced Search criteria discussed below will be
reproduced in English on your Google search page. If your default interface
language for Google is English, then you won’t need to change this
setting.
Now go back to the Google home page and
click on the Advanced Search link to the right
of the search bar.
To answer question 2, use the Advanced
Search features to fine tune your search as follows:
Find results |
with all of the
words |
advantages |
|
with the exact phrase |
limited liability company |
Language |
English |
|
Date |
past 3 months |
|
This will limit the search returns to information
placed online in the last three months. If it is not important to have
recent information, you can enter a longer time limit to increase the
number of hits returned.
Occurrences |
in the title
of the page |
The Occurrences criteria determines
where the search engine will look to find the words or phrases entered
in the search query. If in the title of the page is selected,
then the main body of text on a web page will be ignored in favour of
the page title. This will make the search much more specific.
You will notice that defining your search
criterion dramatically reduces the number of hits. However, the hits you
do get are likely to contain useful, up-to-date information.
Now change the Occurrences setting
to:
Occurrences |
in links to
the page |
If other people have linked to the page
specifically because they have found useful information concerning the
advantages of a limited liability company,
there is a very strong chance that the returned hits will have the information
you need.
This is an extremely useful feature. Your
returned hits will now be limited to those websites which other people
have found useful, rather than simply pages which happened to be in Google’s
index.
Now use the Advanced Search settings
to find the answer to question 2.
Remember, if your search query does not
return a sufficient number of links, modify your settings to broaden your
search criterion. Changing the Occurrences settings can greatly
increase or reduce the number of hits.
These and other advanced searches
can also be carried out directly from the search box. Enter Google
cheat sheet into the Google search bar and click on the
relevant link to get a useful list of short cuts and operators. |
Answer
Advantages of operating as
a LLC/PLLC:
Limited Liability:
Owners of a LLC have the liability protection of a corporation.
A LLC exists as a separate entity much like a corporation. Members
cannot be held personally liable for debts unless they have signed
a personal guarantee.
Flexible Profit Distribution:
Limited liability companies can select varying forms of distribution
of profits. Unlike a common partnership where the split is 50-50,
LLCs have much more flexibility.
No Minutes: Corporations
are required to keep formal minutes, have meetings, and record resolutions.
The LLC business structure requires no corporate minutes or resolutions
and is easier to operate.
Flow Through Taxation:
All your business losses, profits, and expenses flow through the
company to the individual members. You avoid the double taxation
of paying corporate tax and individual tax. Generally, this will
be a tax advantage, but circumstances can favor a corporate tax
structure.
Disddvantages of operating
as a LLC/PLLC:
Limited Life: Corporations
can live forever, whereas a LLC is dissolved when a member dies
or undergoes bankruptcy.
Going Public: Business owners with plans to take their company public,
or issuing employee shares in the future, may be best served by
choosing a corporate business structure.
Added Complexity:
Running a sole-proprietorship or partnership will have less paperwork
and complexity. A LLC may federally be classified as a sole-proprietorship,
partnership, or corporation for tax purposes. Classification can
be selected or a default may apply.
|
3) Outline any relevant considerations to the acquisition of these
entities by a foreign buyer.
You can search for more than one phrase
at a time in Google, and using synonyms or equivalent phrases in repeat
queries can increase the chances of returning useful search results.
Compare the following searches to find out
what foreign buyers should know before investing in a limited liability
company.
“limited liability company”
“foreign ownership”
“limited liability company”
“foreign buyer”
“limited liability company”
“foreign purchaser”
Now repeat this search strategy for professional
limited liability companies to find the answer to question 3.
Answer
Generally, there are no restrictions
on foreign ownership of a company formed in the United States. The
procedure for a foreign citizen to form a company in the United
States is the same as for a U.S. resident. It is not necessary to
be a U.S. citizen or to have a green card to own a corporation or
limited liability company formed in the United States.
|
|
