PROTECT YOUR ASSETS WITH A LIMITED LIABILITY COMPANY
A limited liability company, commonly called an "LLC," is a business structure that combines the pass-through taxation benefit of a partnership or sole proprietorship with the limited liability of a corporation.
Like owners of partnerships or sole proprietorships, most LLC owners report business profits or losses on their personal income tax returns. The LLC itself is not a separate taxable entity unless you elect that the LLC be taxed as a corporation.
Like owners of a corporation, all LLC owners are protected from personal liability for business debts and claims—a feature known as "limited liability." This means that if the business owes money or faces a lawsuit, only the assets of the business itself are at risk. Creditors usually can't reach the personal assets of the LLC owners, such as a house, stocks or bank accounts. Both LLC owners and corporate shareholders can lose this protection by acting illegally, unethically, or irresponsibly.
For these reasons, many people say the LLC combines the best features of the partnership and corporate business structures.
Limited liability is often a concern of business owners and landlords who want to protect their personal assets from claims of people injured on the premises and who sue for more than the amount of insurance carried by the business or landlord.
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