What is a limited liability company (LLC)?

A limited liability company (LLC) is a business structure in the U.S. that protects the assets of its owners from lawsuits and creditors concerned with the company's business debts. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship.

What is the difference between a corporation and an LLC?

Forming and running an LLC is less complex and requires less paperwork than a corporation. Both corporations and LLCs provide their owners with limited liability. But LLCs are ordinarily taxed like sole proprietorships or partnerships. In addition, LLC owners do not work as employees of the LLC—they are self-employed business owners.

Can a limited liability company have unlimited liability?

There are several company structures that feature limited liability, including a limited liability company (LLC), an S corporation, and a C corporation. Partnerships may have limited liability partners, but at least one partner must have unlimited liability. What Is Unlimited Liability?