Limited liability company – n : abbreviated LLC, a legal form of company that has many of the tax advantages of partnerships, notably the characteristic of being a pass-through entity for tax purposes. For companies with only one or two owners and no plans to raise money from venture investors, this form of organization has the advantage (over the corporation legal form) of enabling owners to personally receive tax advantages of early-stage losses, as well as to distribute profits without being subjected to both corporate and personal taxation. However, unlike traditional partnerships, the LLC structure protects owners from personal liability in the event of a legal judgment against the company. (Note: See also “S” corporation, another form of business legal organization that shares the “pass-through” feature of the LLC.)

------------------------------------------------------------
Adapted from "The CompanyCrafters Entrepreneur's Dictionary"
Copyright © 2004-2006 CompanyCrafters LLC