What is a Limited Liability Company (LLC)?

Generally considered advantageous for small businesses, LLCs combine the limited personal liability one has when forming a corporation with the tax advantages one obtains if one forms as a partnership or sole proprietorship. In an LLC, profits and losses may be passed through the company to its members or, if desired, an LLC can be taxed like a corporation. LLCs do not issue stock and are not required to observe other corporate formalities. An owner of an LLC is referred to as a "Member" and the LLC is managed by appointed managers or members.