What are the advantages of a limited liability company?

Over 1M Answers AvailableCategory: BusinessWhat are the advantages of a limited liability company?
Angelmimi asked 11 months ago
1 Answers
Angelmimi answered 11 months ago


  • Stocks transfer

One of the advantages of a limited liability company is stocks mobility. This means that anybody who holds a share or shares is free to sell to any buyer who is willing to buy at the price at which it is being offered. It emphasizes seller-buyer satisfaction so once there is a seller and there is a buyer, transaction is free to take place. 

  • Ability to secure huge capital

Joint stock companies are in a position to secure large capital from the sale of shares and from loans from financial institutions.

  • They are accountable

A limited liability company is designed to be public and therefore is enjoined to open its books for public scrutiny. The accounts, thus made public, allows for easy assessment by interested parties. Investors can better assess the performance of the company and to determine whether they want to invest in them or not. With the company account in the public domain, it is a daunting task to steal from the company without being detected.

  • Protection of shareholders

Another advantage is that the investments of shareholders are protected. In other words, where the company collapses, the private properties of investors are not affected. They are only liable to as far as the properties of the company is concerned. 

  • Increased productivity

because they are usually large in size, it has the potential to rip the benefits of large scale production often referred to as economies of scale.

  • Continuity

A limited liability company often has a longer life span. in contrast to sole ownership,the death of a shareholder must not result in the company folding up. As long as the company remains solvent, the company’s operations would not come to a halt.