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law:limited-liability [2026/07/21 09:05] – [Unlimited Liability Companies] Humphrey Boa-Gartlaw:limited-liability [2026/07/21 19:37] (current) – [Corporations & Limited Companies] Humphrey Boa-Gart
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 ====== Limited Liability ====== ====== Limited Liability ======
  
-In the wacky world of business law, **Limited Liability** is a precedent-hardened legal status that protects you from lawsuits & damages incurred by a business entity you are a member, owner or shareholder of. It also protects said business entity from lawsuits & damages incurred by other owners or members. Corporations and their shareholders have a form of Limited Liability which makes up a major backbone of international business law.+In the wild world of business law, **Limited Liability** is a precedent-hardened legal status that protects you from lawsuits & damages incurred by a business entity you are a member, owner, partner or shareholder of. It also protects said business entity //(and its compartmentalized assets)// from lawsuits & damages incurred by other owners or members, or even yourself. Corporations and their shareholders have a form of Limited Liability which makes up a major backbone of international business law.
  
-However, not all business entities nor their owners enjoy Limited Liability status. Most small businesses are unregistered or barely registered, a type of business known as a **d/b/a** or //"Doing Business As"//. These d/b/a's, as well as most basic partnerships, do not have Limited Liability. This means one badly placed legal fiasco can bankrupt everyone involved.+However, not all business entities nor their owners enjoy Limited Liability status. Most small businesses are unregistered or barely registered, a type of business known as a **d/b/a** or //"Doing Business As"//. These d/b/a's, as well as most basic partnerships, do not have Limited Liability. This means one badly placed legal fiasco can bankrupt everyone involved.:psyduck:
  
 A **Limited Liability Corporation** //(also known as an **LLC**)// is a type of hybrid business entity in the United States //(with rough equivalents in many other countries)// which goes through a formal incorporation process specifically designating it as an LLC. The specifics of this process vary by state, but they usually want information about your company, what it does, where you do it, how to contact a representative of your company in person if ever necessary, and of course some processing fees. The final result is a business entity that is laid-back like a d/b/a, but enjoys some of the same Limited Liability benefits & pseudo-personhood that a full-fledged corporation has. A **Limited Liability Corporation** //(also known as an **LLC**)// is a type of hybrid business entity in the United States //(with rough equivalents in many other countries)// which goes through a formal incorporation process specifically designating it as an LLC. The specifics of this process vary by state, but they usually want information about your company, what it does, where you do it, how to contact a representative of your company in person if ever necessary, and of course some processing fees. The final result is a business entity that is laid-back like a d/b/a, but enjoys some of the same Limited Liability benefits & pseudo-personhood that a full-fledged corporation has.
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 These types of entities **//are not//** to be confused with LLC's. Unlike LLC's, corporations enjoy a form of full personhood, and also have more stringent registration & filing requirements with the state. If your business has to deal with a lot of partners or serious investors, and you need some serious legal [[x:servitor|servitors]] to keep them in line, you may want to consider upgrading to a Corporation. These types of entities **//are not//** to be confused with LLC's. Unlike LLC's, corporations enjoy a form of full personhood, and also have more stringent registration & filing requirements with the state. If your business has to deal with a lot of partners or serious investors, and you need some serious legal [[x:servitor|servitors]] to keep them in line, you may want to consider upgrading to a Corporation.
 +
 +To make things even more confusing, some states allow LLC's to use "Ltd. Co." as a suffix on their business name to signify Limited Liability status, even though the abbreviation means //Limited Company// in other English-speaking countries. This is the case for the Institute's holding company, [[https://bestpoint.holdings|Best Point Holdings Ltd. Co.]], which despite this legally-protected misleading name, is in fact a Limited Liability Company and not a Limited Company.
  
  
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 ==== Unlimited Liability Companies ==== ==== Unlimited Liability Companies ====
  
-Since Canadians are insane, they took the concept in the opposite direction, with one called the **Unlimited Liability Company**. With the **ULC**, there is //no limit// to what can be taken from shareholders to repay company debts. Hope your partners are rational sober people who aren't prone to wacky unpredictable behavior!+Since Canadians are insane, they took the concept in the opposite direction, with one called the **Unlimited Liability Company**. With the **ULC**, there is //no limit// to what can be taken from shareholders to repay company debts. Hope your partners are rational sober people who aren't prone to wacky unpredictable behavior, because you're pretty fucked if they aren't!
  
 The only practical use these have in the real world is for **tax-evasion**, as foreign tax authorities will consider Canadian ULC's to be //"pass-through entities"//, letting international megacorps blend their losses together and reduce their tax liability.:pimp: The only practical use these have in the real world is for **tax-evasion**, as foreign tax authorities will consider Canadian ULC's to be //"pass-through entities"//, letting international megacorps blend their losses together and reduce their tax liability.:pimp:
law/limited-liability.1784624728.txt.gz · Last modified: by Humphrey Boa-Gart

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