Which Is Better, Joint-Stock Company Or LLC
If you search Google for your enterprise and choose joint-stock company or LLC, you will find many blogs and articles on this topic. The company represented by the limited liability company is very close to the limited liability company represented by letters LLC. By default, LLC is easy to manage from many aspects, but the factors suitable for the business depend on several aspects. In other words, it is difficult to answer the question of whether to join LLC, but any experienced entrepreneur will study this question as now.
What is the history of joint-stock companies and LLCs?
Historically, people entered commercial enterprises through joint ventures. For example, I have horses and you have spices. Just like we take them on the road to sell spices and distribute profits. However, large enterprises cooperating with multiple partners, such as sailing to the new world, need more efficient means of transportation than joint partners.
The first company we knew was the British East India Company, which was established on December 31, 1600. The difference between Inc. and the partnership is that the company is managed by the board of directors, owned by shareholders, and the partnership is owned and managed by partners. Legally, the partnership hardly provides any protection for the partners. As an independent legal person, the company separates the building owner from the manager.
In response to modern changing conditions, in 1999, Florida state legal institutions employed a limited liability company as a substitute for the joint ventures and companies prescribed by Florida laws. The limited liability company is basically a mixture. Because it looks like a company, but in many cases it behaves like a joint venture.
In 2013, the Florida Limited Liability Company Act(LLC Act) was amended to apply to all Florida limited liability companies after 2015. Prior to this, these regulations lacked many default provisions in the Company Act and the Partnership Act. Fortunately, the Limited Liability Company Law revised in 2013 has greatly improved the old law. If the owners of a limited liability company choose not to sign an operating agreement, the law can be used as an operating agreement.
What are corporate governance documents(such as operating contracts)?
Organizations such as partner enterprises, companies, and limited liability companies can be monitored through internal documents or regulations, if not available. These documents are called management documents of the enterprise. Because these files actually do this. Provide instructions when a specific event occurs, such as the owner’s death or departure.
For cooperative enterprises, the governing document is the cooperation agreement. For a limited liability company, this is an operating agreement. The company uses the articles of association and shareholders’ agreement. As you can see, one document is cheaper than two documents. Therefore, many enterprises choose Florida LLC because they only need one document, not two.
Advantages of Limited Liability Company
With the emergence of Florida Limited Liability Company(LLC), this partnership almost fell out of favor. In the 1990s, the Joint Venture Law was amended to try to make the joint venture closer to the limited liability company, but the joint venture could not provide the level of protection provided by the limited liability company and the company.
In addition, when business owners try to resolve internal disputes between owners in the court, they should realize that there are few active judges before the limited liability company. Therefore, it is more challenging for them to resolve disputes in a joint venture than with a limited liability company. Today’s judges are more familiar with limited liability companies when they start their own businesses, so using a limited liability company increases the opportunity for correct dispute resolution.
How to determine whether an operation contract is required
Therefore, most options seem to be limited to limited liability companies or companies. However, after consulting qualified commercial lawyers, if a limited liability company is used, the next option is usually to let the commercial lawyers prepare, rather than spending money on business contracts or downloading on the website As a certified professional business lawyer, I like professional preparation. However, this is not because of financial advantages, but because general online documents are not suitable for the unique needs of any business, they cannot be modified or modified to meet these needs.
There is an old saying that “a penny is wise and a penny is stupid”. Those who want to save money by purchasing ordinary management documents will spend more legal fees to solve problems. As a person who brings a lawsuit before judges and juries and hears many company divorce disputes, I can prove that the amount of supplementing and resolving disputes far exceeds the cost of appropriate management documents(such as operating agreements) prepared by experienced commercial lawyers.
conclusion
In conclusion, compared with companies or partner enterprises, whether to choose a limited liability company depends on many factors. It is better to simply consult with an excellent and trustworthy commercial lawyer before issuing a decision. In addition, as a mature and smart business owner, whether an operation agreement is needed now or whether an agreement can be reached in the future is to collect facts and educate yourself how to make a business decision after choosing.
