A Limited Liability Company (LLC) is a type of business structure that combines the characteristics of a corporation and a partnership. An LLC offers its owners, known as members, the personal liability protection of a corporation and the tax flexibility of a partnership. This means that the personal assets of the members are typically not at risk in the event of legal action taken against the company or if the company is unable to pay its debts.
LLCs are often favored by small business owners and entrepreneurs because they offer a relatively simple and flexible structure. In most states, there are few formal requirements for operating an LLC, and the members have a great deal of flexibility in how they manage and run the company.
Another advantage of an LLC is that it allows for a variety of ownership structures. For example, an LLC can be owned by a single individual, by multiple individuals, or by other companies. Additionally, members of an LLC can participate in the management of the company or can choose to be passive investors.
Overall, an LLC can be an attractive option for those looking for the liability protection of a corporation and the tax flexibility of a partnership. However, it's important to carefully consider the specific requirements and regulations in your state before deciding if an LLC is the right choice for your business.