Limited Liability Companies (LLCs)

A Limited Liability Company (LLC) is a separate legal entity (business structure) from the owners of the LLC. LLC owners are typically referred to as "members" rather than stockholders or shareholders like traditional corporations.

LLCs are becoming more and more popular, and it's easy to see why. They combine the personal liability protection of a corporation with added tax benefits where certain income, deductions, and losses can be passed through the company to the individual tax return of each member ("pass through taxation"). In other words, the owners (or "members") of a LLC are not personally liable for the company's debts and liabilities, and they have the benefit of being taxed only once on their profits similar to a partnership. This is why an LLC is frequently referred to as a hybrid of a corporation and a partnership because it offers the personal liability protection of a corporation along with a lot of the tax benefits and flexibility of a partnership.