Limited liability business forms are generally created by the government. Given this fact, to what extent is it appropriate for the government to interfere in the operations of such a limited liability entity?

Answer:

A Limited Liability Company or LLC is the least complex and complicated business structure. Starting an LLC gives limited liability, legal protection of personal assets and pass-through taxes. The US government’s role in business is quite old. The US constitution gives necessary power to the government to regulate businesses. Although business community enjoys lot of independence, government still has several ways to implement its authority: -

Businesses that form LLC need to register themselves with the state government for operations. The registration is done for the purpose of defining financial liability the owners of the company have. This limits risk of owners in their organization. Registration also allows the government to monitor these companies.

Any contractual obligation with other businesses forms contractual enforcement. These contracts can be complex like merger or simple contracts like supply of goods and services. The enforcement of these contracts is done by government. In case of breach of contract, these parties bring each other to the jurisdiction of court.

Government also includes protecting customers or consumers. When a party breaches the contract, then the other party has the recourse of law. If the product causes harm, then also, the individuals have the recourse of law. Correct labelling also comes under government jurisdiction where the correct labelling of food items in respect to nutritional details, packaging and expiry dates etc, should be correct. Numerous states also help state and central government agencies to protect employee rights. It also takes care of the Health and Safety of the workers. It ensure healthy and safe work environment for the employees and also protects them from any type of discrimination. The government interference also comes while taking care of environment. It regulates the industry and protects environment and public from harmful impacts of industry. It also regulates and monitors the taxes levied on businesses and that these businesses are paying taxes on time and resultant revenue of the company and individuals,

Government also makes it necessary for the companies to make financial information public in the interests of the shareholders and thereby protecting the rights of the people