What is a limited liability company (LLC)?

A limited liability company (LLC) is defined as a form of business organization that combines characteristics of both a corporation and a partnership. This structure provides flexibility in management and profits similar to a partnership while offering the personal liability protection associated with a corporation. Owners, known as members, are typically shielded from personal liability for business debts and claims, meaning their personal assets are generally protected if the LLC faces legal issues or fails financially.

The features of an LLC make it an attractive option for many business owners. For instance, it allows profits and losses to be passed through to members without facing corporate income tax, much like partnerships. Additionally, it can have an unlimited number of members, which can include individuals, corporations, or other LLCs, thereby enriching the potential for investment and collaboration.

This option is fundamentally important for individuals and businesses looking to balance the benefits of personal asset protection with the operational flexibility that might be required in various business ventures.