Limited Liability Company (LLC)

Overview

Description

A hybrid of a partnership and a corporation, a limited liability company (LLC) offers the protection of a corporation without its tax implications. The revenue from an LLC flows through to its members. The creation of LLCs is governed by state laws, and LLCs are generally simple to create. In most states, LLCs use articles of organization that set the formal partnership requirements; other states may use a different term, such as a certificate of formation, for the same purpose. The company files these articles with the state in which the LLC is organized. A corporation exists in perpetuity, but depending on the agreement and the state law, an LLC may dissolve or employ other options such as a buyout in the case of the death or insolvency of any one of its members.

At A Glance