The Benefits of Forming a Limited Liability Company (LLC)
The type of company we would create is a Limited Liability Company (LLC). Miller (2015) claims that compared to S- and C-corporations with at least two partners, the Limited Liability Company is simpler to set up. Therefore, the LLC unit would assist the start of the business without going for complicated details and procedures because we are two individuals from various professions, one with an MBA and the other with advanced engineering design. The commerce can continue after registration with the secretary of state's office.Asset Separation and Limited Liability
In addition to having less complicated information, LLCs are adaptable and very effective at separating the assets of the firm from the owners of the business (Light, 2015). In this aspect, there would be a defined variability between our personal properties and the business. Notably, the limited liability aspect is restricted in the company investment while the individual liabilities remain untouched even in the case of bankruptcy of the commerce. As opposed to the general partnership with unlimited liability, there would be insecurity of personal assets in the case of business failures.Residency and Operating in any Preferred Nation
On the other hand, choosing LLC entity would be essential as it has no restriction for residency, meaning one is free to operate in any preferred nation (Miller, 2015). Having been registered with the appropriate state office of a given country, the business is free to go whether owners are foreigners (Light, 2015). The requirement is different from S and C- corporations that prompt the enterprise owners and partners to be registered citizens of chosen countries for business.Operating in Illinois State
The company will be operating in Illinois State. The reason for settling on the Illinois country is that once professionals who are licensed to undertake a business decision to join up together, there are minimum barriers. For instance, Illinois readily accept and approve the applications from experts such as proficient engineers and diversity of careers as a way of encouraging innovation. The pertinent rules of the Illinois will be applicable from the beginning of application to the time when the business will be fully operational.Formation and Incorporation Process
In order to form an LLC in Illinois, partners are expected to pay BizFilings package prices that offer three incorporation service packages to choose from. Also, the state fee for a standard turnaround is vital for the individuals planning to be parties of the LLC (Comtsian, 2015). Other necessary payments include first year filing and report fees of Articles of Organization.Requirements and Obligations
It is mandatory to one or more members and managers who have expressed their commitments to run the business (Comtsian, 2015). Regarding residency and age requirements, Illinois lacks such necessities. However, for the foreigners, they must provide accreditation for their profession from the originating countries.Given that the business will involve an agent, it will be forced to comply with the rule that is prompting all the LLCs to provide the name and address of the registered agents together with their physical addresses (Comtsian, 2015). Additionally, the agents must be available during the operational business hours to accept the legal and tax documents of the firm.Among the vital forms for the LLC business in Illinois is filling with a financial report during the 60-day duration of the first day of the anniversary month of the date of incorporation (Comtsian, 2015). On the other hand, the partners are obliged by the law to file the form of Articles of Organization and place it with the secretary of the Illinois state.Factors Impacting the LLC Business
There are several factors impacting such a business.Product Liability
First is the product liability that positively influences the business. Since the aspect maintains that manufacturers are held liable for giving consumers defective products, guaranteed benefits would be achieved (Gordon et al., 2016). For instance, by assigning the third manufacturing party to produce similar goods of the company, there would be a minimization of penalties that would render direct loss to the firm. Instead, the third party is directly responsible for the negligence.Negotiable Instruments
Negotiable instruments that are unconditional promises or orders for the payment a certain fixed amount of money also affect the business (Twomey & Jennings, 2013). Usually, it is in the form of drafts like checks and, certificates of deposits, and notes. Since we will be operating financing and credit card business, the use of these payment means would give security for the loan and other payments.Uniform Commercial Codes
Additionally, the prevalence of uniform commercial codes would allow for the practice of secured transactions (Gordon et al., 2016). For instance, the financing and credit card commerce would need to comply with the UCC requirements to ensure increased security and privacy for the clients coming for loans or the ones paying for the purchased goods.Bankruptcy and Personal Assets
In the event of failure to settle the debts by businesses or firms, they are automatically declared bankrupt (Gordon et al., 2016). Should such instance occur, we would be forced to dissolve the business? However, the LLC has the privilege where the personal assets of the partners are free during an insolvent session.Protection of Intellectual Property
Also, the use of patents would maintain the exclusiveness of our innovation such as in revolutionary tailgating furniture as well as financing credit card company (Twomey & Jennings, 2013). Even when franchising the concept of the business to other people, the originality remains to be for our firm. Trademarks that are intellectual property rights that give the inventors a solemn right to use or sell the idea to another party over a specified period further influences the business (Twomey & Jennings, 2013). Therefore, the act would authorize us as the partners to continue having new unique inventions in the manufacturing of tailgating furniture to increase the level of competition.Agency Laws, Contracts, and Sales Law
Because the business will involve the use of an agent for negotiation of the office space, the agency laws will be paramount. According to Gordon et al. (2016), the rules would assist the business in engaging these negotiators in writing to foster legalities.Contracts which legally bind agreements between two or more parties will assist in identifying the written and expressed forms of cooperation between different individuals and clients through its laws (Gordon et al., 2016). For instance, giving a detailed relationship when there is a need to franchise or selling trademarks for other manufacturers in future.Sales law that widely incorporates products sold for money or credit will impact our business in that it will foster a full commitment to achieve the set agreements (Gordon et al., 2016). In case orders for the tailgating furniture will be made by customers in prior and a down or full payment made, an effort will be made to seal the deal.Torts and Reputation
Torts in this platform entail a noncriminal violation of the reputation of the property (Twomey & Jennings, 2013. Being in the manufacturing and design of tailgating equipment, our firm would have the accountability compromised. Sometimes, there would be negligence in the fabrication of tailgating, an instance that would raise doubt in the efficiency of our services.References
Comtsian, S. (2015). Contractual Mechanisms of Investor Protection in Non-Listed Limited Liability Companies. Vill. L. Rev., 60, 955.
Gordon, J. M., Chapman, J., Akins, B., Tate, T., & Gordon, W. (2016). Business law: An introduction. Georgia Gwinnett College.
Light, R. S. (Ed.). (2015). Structuring venture capital, private equity, and entrepreneurial transactions. Wolters Kluwer Law & Business.
Miller, M. R. (2015). The New York LLC Act at Twenty: The New York Limited Liability Company Law at Twenty: Past, Present & Future. Touro L. Rev., 31, 403-1089.
Twomey, D. P., & Jennings, M. M. (2013). Business Law: Principles for Today’s Commercial Environment. Nelson Education.
