By Walter Nunez & Yhordan Serpentini
During your time as an entrepreneur and small business owner, you’ll come across the term Limited Liability Company, or LLC for short; however, what exactly does this mean? An LLC is a form of business whose owners enjoy limited liability, but which is not a corporation.
A limited liability company is a flexible form of enterprise that blends elements of partnership and corporate structures. An LLC is not a corporation; it is a legal form of company that provides limited liability to its owners. LLCs do not need to be organized for profit.
In certain US states, businesses that provide professional services requiring a state professional license, such as legal or medical services, may not be allowed to form an LLC but are required to form a very similar entity called a Professional Limited Liability Company (PLLC).
A Limited Liability Company is also a hybrid business entity having certain characteristics of both a corporation and a partnership or sole proprietorship (depending on how many owners there are). An LLC, although a business entity, is a type of unincorporated association and is not a corporation.
The primary characteristic an LLC shares with a corporation is limited liability, and the primary characteristic it shares with a partnership is the availability of pass-through income taxation. It is often more flexible than a corporation, and it is well-suited for companies with a single owner.
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