Law Dictionary

limited liability corporation

A limited liability company, commonly called an "LLC," is a business structure that fits somewhere between the partnership or sole proprietorship and the corporation. Like owners of partnerships or sole proprietorships, LLC owners report business profits or losses on their personal income tax returns; the LLC itself is not a separate taxable entity.



Like a corporation, however, all LLC owners are protected from personal liability for business debts and claims -- a feature known as "limited liability." This means that if the business owes money or faces a lawsuit for some other reason, only the assets of the business itself are at risk. Creditors normally can't reach the personal assets of the LLC owners, such as a house or car. (Both LLC owners and corporate shareholders can lose this protection by acting illegally, unethically, or irresponsibly.)



For these reasons, many people say the LLC combines the best features of both the partnership and corporate business structures. To learn more about limited liability companies and limited liability

Source : LawyerIntl.com

Language : English

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