Another benefit of a limited liability company (sometimes referred to as a limited liability corporation) over a sole proprietor business structure is that if an owner in the LLC dies, the business can still continue without any disruption in business operations.
With a sole proprietor, the person is the business and the business is embodied in the person. Accordingly, if the person/owner dies, so does the business. A limited liability corporation is its own separate person and is independent of any of its owners. If one of the owners in an LLC dies, the LLC still remains in existence.
This is an important feature to have because the last thing any executor or administrator of a deceased person’s estate wants to deal with is the immediate termination of an otherwise profitable and ongoing business.
This is the benefit of business continuity and while many new entrepreneurs do not focus on this at the beginning of a business, it is an important feature to have when iin real life a member or owner dies or becomes incapacitated. The continuity will help the business to maintain its profitability and value which in turn benefits the beneficiaries of the deceased owner.
