What are the disadvantages of an LLC?
The disadvantages of an LLC include: More Paperwork Than an Ordinary Partnership Documents must be filed at the state level to create an LLC, which is not the case with a general partnership. Dissolution Date Some states require that a dissolution date be listed in the articles of organization. This date may be amended. Further, certain events, such as death of a member, a member leaving, bankruptcy, etc. can be a dissolution event. A corporation has unlimited life and these events are not dissolution events for a corporation. Newer Entity Type The LLC is a newer entity, and people are not as familiar with the LLC as a corporation.
A. The disadvantages of a limited liability company (LLC) include: Documents must be filed at the state level to create an LLC, which is not the case with a general partnership. Note: a corporation and limited partnership requires documents to be filed at the state level also. Dissolution Date: Some states require that a dissolution date be listed in the Articles of Organization. However, this date may be extended by filing an amendment to the Articles of Organization. Further, certain events, such as death of a member, a member leaving, bankruptcy, etc. can be a dissolution event. These events can be specified in the LLC Operating Agreement or by statue. A corporation has unlimited life and these events are not dissolution events for a corporation.
