Limited Liability Company - LLC


DEFINITION of 'Limited Liability Company - LLC'

A corporate structure whereby the members of the company cannot be held personally liable for the company's debts or liabilities. Limited liability companies (LLC) differ slightly from one country to the next. However, it is essentially a hybrid entity that combines the characteristics of a corporation and a partnership or sole proprietorship. While the limited liability feature is similar to that of a corporation, the availability of flow-through taxation to the members of a LLC is a feature of partnerships.

BREAKING DOWN 'Limited Liability Company - LLC'

Although LLCs have some attractive features, they also have a number of disadvantages, especially in relation to the structure of a corporation. A LLC has to be dissolved upon the death or bankruptcy of a member, unlike a corporation, which can exist in perpetuity. Also, a LLC may not be a suitable option when the objective of the founder is to eventually become a publicly listed company.

  1. Articles Of Organization

    A formal legal document used to establish a limited liability ...
  2. External Claim

    A claim against an individual that does not arise out of any ...
  3. Corporation

    A legal entity that is separate and distinct from its owners. ...
  4. Limited Partnership - LP

    Two or more partners united to conduct a business jointly, and ...
  5. Partnership

    A business organization in which two or more individuals manage ...
  6. Limited Liability

    A type of liability that does not exceed the amount invested ...
Related Articles
  1. Savings

    Top 5 Reasons Banks Won't Cash Your Check

    Learn the top reasons that a bank won't cash your check, and find out what steps you can take to prevent those scenarios from happening.
  2. Entrepreneurship

    Taxes in New York for Small Business: The Basics

    Learn how small businesses are taxed in New York, and understand how tax rates vary based on whether the business is an S corporation, LLC or partnership.
  3. Fundamental Analysis

    The Basics Of Corporate Structure

    CEOs, CFOs, presidents and vice presidents: learn how to tell the difference.
  4. Entrepreneurship

    How To Start a Successful Food Truck

    Understand how a food truck operates and what makes a food truck successful. Learn about the top five steps to run a successful food truck.
  5. Active Trading Fundamentals

    The Biggest Private Equity Firms in New York City

    Discover the top four largest private equity firms, including Goldman Sachs, headquartered in New York City, as ranked by total assets raised since 2010.
  6. Fundamental Analysis

    Looking For Profit In Privately-Held Companies

    Private companies offer unique opportunities for those with the knowledge and resources to take advantage.
  7. Entrepreneurship

    Can You Handle A Home-Based Business?

    Find out if you have the traits to be a top entrepreneur.
  8. Entrepreneurship

    Should You Incorporate Your Business?

    Find out how becoming a corporation can protect and further your finances.
  9. Entrepreneurship

    Starting A Small Business

    Starting a small business can be a daunting task. This tutorial will break the process down into easy steps.
  10. Home & Auto

    Equity Stripping Leaves Creditors Empty-Handed

    Add additional debt to your real estate assets to keep the creditors at bay.
  1. Do financial advisors work only in banks?

    While the majority of financial advisors work for financial institutions such as banks, a large proportion of them are self-employed ... Read Full Answer >>
  2. What does a Power Purchase Agreement (PPA) mean in the utilities sector?

    Traditionally, a power purchase agreement, or PPA, is a contract between a government agency and a private utilities company. ... Read Full Answer >>
  3. What is a family Limited Liability Company (LLC)?

    A family limited liability company (LLC) is formed by family members to conduct business in a state that permits such form ... Read Full Answer >>
  4. What risks does a business owner face under a business structure with unlimited liability?

    The risks that a business owner faces under a business structure with unlimited liability are literally unlimited, but they ... Read Full Answer >>
  5. How do I set up a Limited Liability Company (LLC)?

    The specific process and procedures for organizing a limited liability company (LLC) vary from state to state. However, the ... Read Full Answer >>
  6. Can a Limited Liability Company (LLC) issue stock?

    A limited liability company, or LLC, cannot issue stock. Instead, an LLC is structured to have single or multiple owners ... Read Full Answer >>
  7. What are some examples of how corporations manage short-term investments?

    One of the easiest ways for a business owner to reduce liability is to incorporate as a legal entity to enjoy the protection ... Read Full Answer >>
  8. Which factors drive the marginal propensity to consume?

    A limited liability company (LLC) is not a separate entity from its business owners but is instead considered a pass-through ... Read Full Answer >>
  9. Do companies have to pay back their paid-up capital?

    One of the most important selections a business owner must make is determining which legal business structure is the most ... Read Full Answer >>
  10. What are the advantages to registering a Limited Liability Company (LLC) in Delaware?

    When a small business determines that a limited liability company (LLC) is the most suitable business structure under which ... Read Full Answer >>
  11. What are the major types of business in the private-sector and how do they differ ...

    A broad variety of different businesses, company structures and industries exist within the private sector in the United ... Read Full Answer >>
  12. What are the different kinds of shares that a Public Limited Company (PLC) can issue?

    A public limited company is a legal corporation structure in the United Kingdom that is essentially similar to a publicly ... Read Full Answer >>
  13. What are the primary disadvantages of forming a joint venture?

    A joint venture is a common method to combine the business prowess, industry expertise and personnel of two otherwise unrelated ... Read Full Answer >>
  14. I am starting a limited liability company (LLC). I will be the sole member. Can I ...

    In a word, yes. A limited liability company (LLC) is eligible to establish a simplified employee pension (SEP). Keep in ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bar Chart

    A style of chart used by some technical analysts, on which, as illustrated below, the top of the vertical line indicates ...
  2. Bullish Engulfing Pattern

    A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses ...
  3. Cyber Monday

    An expression used in online retailing to describe the Monday following U.S. Thanksgiving weekend. Cyber Monday is generally ...
  4. Take A Bath

    A slang term referring to the situation of an investor who has experienced a large loss from an investment or speculative ...
  5. Black Friday

    1. A day of stock market catastrophe. Originally, September 24, 1869, was deemed Black Friday. The crash was sparked by gold ...
Trading Center