What is an LLC?

Answer:
LLC usually means Limited Liability Corporation.

It is seen as offering the best of both worlds of partnerships and corporations. There are many types of company structures that answer the question of “what is a company comprised of” differently.

Some company structures distinguish between those who work for the company, those who invest in the company and the company itself (independent of the workers). Some structures do not see these components as separate and recognize the overlap of roles some people have (for example, if someone is both an investor in the company and a worker there).

In a simple partnership, every partner shares the risks (liability), debts and benefits of the business with the other partners. In a corporation, the people who work for the company and the company itself are separate entities, or units of business.

A limited liability corporation operates similarly to a partnership in that it has members who have gone into an agreement with each other and who often share benefits and risks of a business. However, the members of an LLC only share the risks of the rest of the company proportionate to how much they have invested. Although each state in the US has different governing laws over the structure and formation of LLCs and how they are taxed.