LLC DefinitionLimited Liability Company. A type of company, authorized only in certain states, whose owners and managers receive the limited liability and (usually) tax benefits of an S Corporation without having to conform to the S corporation restrictions.
LLC Definition - Characteristics of a CorporationLLC Definition: An LLC has characteristics of a corporation, but it is not. It does offer some of the benefits of a corporation, particularly the limitation of an owner's liability. An LLC provides lawsuit protection, credibility, tax savings, deductible employee benefits, asset protection, anonymity, the ease of raising capital, creating a separate legal entity for personal protection, an LLC has a broad range of powers beyond that of a sole proprietorship, small claims court benefits, separate liability for corporate debts, and perpetual duration. When you form an LLC you create a separate legal person and you are a shareholder. LLCs are preferred because they combine the limited liability protection of a corporation and the pass through taxation of a or partnership. The downside to an LLC is that it does not offer the free transferability of ownership, perpetual existence, and the ability to be owned by a single individual.
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