limited liability company
hybrid cross of Corp. & partnership
A relatively new and flexible business ownership structure. Particularly popular with small businesses, the LLC offers its owners the advantage of limited personal liability (like a corporation) and a choice of how the business will be taxed. Owner/Partners can choose for the LLC to be taxed as a separate entity (again, like a corporation) or as a sole proprietorship (if one owner), or a partnership-like entity in which profits are passed through to partners and taxed on their personal income tax returns. Although state laws governing creation of LLCs and IRS regulations controlling their federal tax status are still evolving, because of their flexibility LLCs are increasingly regarded as the small business legal entity of choice.