Limited Liability Company - LLC

AAA

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.

INVESTOPEDIA EXPLAINS '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.

RELATED TERMS
  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. Entrepreneurship

    I am starting a limited liability company ...

  2. ogether, management and the board of directors have the ultimate goal of maximizing shareholder value.
    Investing Basics

    The Basics Of Corporate Structure

  3. Fundamental Analysis

    Looking For Profit In Privately-Held ...

  4. Entrepreneurship

    Can You Handle A Home-Based Business?

Hot Definitions
  1. Turkey

    Slang for an investment that yields disappointing results or turns out worse than expected. Failed business deals, securities ...
  2. Conduit Issuer

    An organization, usually a government agency, that issues municipal securities to raise capital for revenue-generating projects ...
  3. Financing Entity

    The party in a financing arrangement that provides money, property, or another asset to an intermediate entity or financed ...
  4. Hyperinflation

    Extremely rapid or out of control inflation. There is no precise numerical definition to hyperinflation. Hyperinflation is ...
  5. Gross Rate Of Return

    The total rate of return on an investment before the deduction of any fees or expenses. The gross rate of return is quoted ...
  6. Debit Spread

    Two options with different market prices that an investor trades on the same underlying security. The higher priced option ...
Trading Center