Legal Underpinnings of Effective Business

The best strategy to minimize the liability within the framework of sole proprietor ship is to alienate the property, i.e. to enter into gift agreement with your relatives or close friends, whose loyalty is guaranteed. Since the liability is personal, the property that belongs to friends or relatives cannot be exacted and is not callable under any standards.

For general partnership the same strategy seems to be the most effective  tool to evade liability (Kraakman et. al, 2004). The partners are strongly recommended to classify the property that is essential for the effective business conduct and their personal possessions that shall legally belong to their friends and relatives.

In LLP it is desirable to limit the liability contractually, i.e. to stipulate the minimal scope of the one. However, if active participation in the management process is necessary, this this tactics is not applicable.

The issue of liability relating corporations is the most lucrative in terms of personal liability, since no one is present and the property of the corporation is the only callable one. In order to reduce it the most effective strategy proves to be the transfer of the title to the owners of the company.

As far as LLC it concerned, practically it can bear liability as  a corporation, if the members transferred all their property to the entity. The most valuable assets in this case are strongly recommended to be registered on the relatives and close friends (McKendrick, 2005).

As far  as my personal business aspirations are concerned, the most lucrative business opportunity seems to be initiation of the boutique law firm in the form of LLC.  This organizational legal form is the most optimal one for this kind of business in terms of management, personal liability exposure, taxation and state registration issues.

Considering the economic performance, under the present provisions of the United States of America Tax legislation, the company is free to choose the way it will be taxed. To be more exact, for these types of companies taxation policies applied for sole proprietorships, partnerships and corporations can be opted for.

With regard to the issue of personal liability of the members of this company, it shall be highlighted that they are protected from the deeds and debts of the company, or their liability is limited to a specific amount of money, in accordance with the state local legislation (Kershaw, 2009). To illustrate, the company is proposed to be active in the state of Texas, in where personal liability of the LLC members is almost totally annihilated.

In relation to the management aspects of  the company, it shall be stressed that the company can choose whatever managerial structures it considers relevant for its activity, since no obligatory state prescriptions exist. Moreover, the members of the company are not banned from active participation in the managerial process. The only difficulty that can hypothetically arise is the indetermination of who is considered the company principal (Penning, Wezel, 2009). However, this inconsistency can be defined by the company charter and the ambivalence will be eradicated. Another important advantage of this legal form is the ability to take quick managerial decisions that are not to be approved by any supervisory committees.

Overall, with the growth of  the company LLC provides the most friendly way to transform the company into a corporation.