Limited Liability Corporations and Partnerships Essay

Limited Liability Corporations and Partnerships - Essay Example It integrates properties of general partnerships with properties of corporations. This form of business ownership is common among professionals in ‘service-oriented’ industries such as law and accountancy. The partnership restricts liability to partners who either directly or indirectly, through negligence or malpractice, initiate such liabilities. Other aspects of the form of business are however similar to those of the general partnership (Miller, 2012). The scope of a limited liability partnership, as a business enterprise, therefore identifies a number of roles. One of such roles is to undertake production process. Whether the partnership deals in goods or services, it converts resources such as labor and raw materials into more refined and consumable products. As a result, limited liability partnerships play the role of ensuring consumer’s utility through provision of either goods or services or both. Another role of a limited liability partnership involves m arketing of its products. Based on competition among players in a market, each enterprise develops strategies towards attracting and retaining customers. The organizations also face the role of financial management. Being profit oriented enterprises, limited liability partnerships focuses on managing their finances to meet their production costs and needs. Financial management is also important in ensuring minimized production costs for higher profit margins. Another role of the organization involves recruitment and management of human resource. Being an employer together with the need to develop an efficient labor force initiates the responsibility of managing personnel. Like any other form of business organization, limited liability partnerships have a role in social responsibility. The organizations must ensure that their activities are friendly to their environments and that they make efforts to benefit their immediate societies (Miller, 2012; Sde, n.d.). Advantages of limited l iability partnerships The main advantage of a limited liability partnership is the limitation of partner’s liabilities. This protects partners from negligence, mistakes, and fraud by other partners. In addition, limitation of partners’ liability to responsibility over losses promotes diligence and improved efficiency in operations. This is because partners know that they are solely responsible for their faults. Another advantage of a limited liability partnership is its wider base for raising capital from many partners (Miller, 2012). Disadvantages of limited liability partnerships One of the major disadvantages of limited liability partnerships is the freedom of partners to operate independently within the partnership. This means that decisions are individually made and may conflict with the organization’s objectives. Limiting liability to responsibility of partners is also a threat to innovation due to fear of bearing associated losses (Miller, 2012). Limited liability corporations and their roles Limited liability corporations are business organizations with separate legal entities. The owners of the business are different from the management team that is normally composed of board of directors and senior employees. Like in limited liability