LLC: Limited Liability Company
An Overview of Limited Liability Company (LLC)
A Limited Liability Company, or LLC is a form of doing business, combining limited liability for all owners (called members) with taxation as a partnership. An LLC is formed by filing articles of organization with an appropriate state official, such as the Secretary of State.
Under the typical LLC statute, the members (analogous to shareholders in corporations and partners in partnerships) are all shielded from the company's debts unless they affirmatively undertake responsibility for such debt, such as by a guarantee to a lender. Also, the Internal Revenue Service has ruled repeatedly in precedential rulings that if the LLC is formed in a particular manner the company would be treated as a partnership for tax purposes.