A Limited Liability Company (LLC) is a business structure that combines characteristics of both sole proprietorships and corporations. An LLC can be taxed like a sole proprietorship or partnership, depending on its setup. Additionally, the LLC model offers limited liability protection to its owners.
Keep in mind that an LLC is not treated as a separate entity for tax purposes. This means the company doesn't pay taxes or directly report its losses. Instead, the founders report the business's profits or losses on their own tax returns. Similar to corporations, members of an LLC are shielded from personal liabilities.
