Yes, sure the abbreviation can be explained, most people can, but do you know exactly what it is? If you say it stands for a limited liability company, you are right. But few people know the other explanation. Most people don\’t care, but enthusiasts do. One opinion is that it\’s acompanythat only guarantees its products for two years and then doesn\’t . It\’s hilarious and funny, but also goofy and completely off the mark. The product has nothing to do with this acronym. Such companies often don\’t even need to produce their own products.
So what does it mean? It means that the company is truly responsible. But not for the product, and not for the individual customer.
Usually this acronym comes up when corporate bankruptcy and its possible liabilities are discussed. Unfortunately, this happens and must be dealt with somehow. Now, here is what we want to know. Such a company has assets, and with all theseassets it is responsiblefor the payment of the amount owed. More precisely, it is responsible for fulfilling its obligations and liabilities. Oh, with all its assets, you say, but where is that limitation? It is right next to it.
The firm has partners who, in a sense, guarantee themselves as well. If the firm itself cannot do so, it is now up to them to stand up for the firm and clear its debts. And this is the crux of the matter. The partners do not guarantee all the assets, but are limited to the amount of the deposit obligation.
The partners also have rights as well as obligations. However, there are so many of them that it is impossible to introduce them here, so we will only incidentally mention the right to profit sharing and the right to participate in the management of the firm.
But let us return now to the deposit obligation. Its amount is not fixed by law, but it is set by law. Again, this has legal ramifications and is usually stated in the contract. If a partner gets into trouble, he or she can be removed, but not in an easy way;
a caucus must be called,and a general meeting must be held with at least two-thirds of the voting members in favor.
The whole issue is more complex, but here was a very simple explanation of the acronym.
In brief.