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CRICOS Course Code: 0100013
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THE NEGATIVES:
Limitations of the limited liability: In the case of any discrepancies found in your sales etc., you cannot stay under the umbrella of limited liability. Licensing and Filing fees: There is a fee that is charged when you set up a new LLC in any state. This as well as a set amount is to be paid annually to keep your LLC current and up and running. Complicated Tax Policy: There are additional forms that need to be filled for tax purposes like Company tax filing and K-1s etc. This adds on to the hassle of managing a company. Severe consequences of member turnover: In some states, if a member does not continue with the LLC, then the company can go bankrupt. The remaining members may even have to start up a new LLC from scratch. Harder to raise money: It is hard for an LLC to get any form of outside investment, as people prefer to invest in C-Corps. As you would have to be a member to receive any profit on shares, an external investor will not get the profits. Only good for the start: An LLC is good for the beginning of the business until an external source of investment is needed.
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