Question

What is a limited liability company?

Answer 1

A limited liability company (LLC) is a business structure that combines the limited liability feature of a corporation with the flexibility and tax benefits of a partnership. The owners of an LLC are not personally liable for the company's debts or obligations, protecting their personal assets.

Step-by-step explanation:

A limited liability company (LLC) is a business structure that combines the limited liability feature of a corporation with the flexibility and tax benefits of a partnership. An LLC is owned by its members and can have one or more owners. The owners are not personally liable for the company's debts or obligations. Instead, their liability is limited to their investment in the company.

For example, let's say you and a friend decide to start a photography business together. You form an LLC, with each of you as a member. If the business fails and incurs debts, your personal assets, such as your home or car, are protected. You would only be liable for the amount you invested in the company.

Answer 2

A Limited Liability Company or LLC is a cross between a corporation and partnership. It basically combines the protections of a corporation and the flexibility of a partnership. For one, members of this kind of company are not liable for debts and they are able to file an informal tax return.