What is a Limited Liability Company?

A Limited Liability Company structure allows the members of the corporation to be protected from the debts and liabilities of the company. An LLC has a combination of characteristics from a partnership or sole proprietorship and a corporation. The main advantage of an LLC is the principal's protection from personal liability. The members personal assets are separated from those of the corporation, unlike in a sole proprietorship or partnership. However, all three corporate structures require the profits of the company pass through the owner's tax return.