Limited liability companies are also referred to as an "LLC." The LLC is a business form wherein the shareholders have limited liability for the activities of the corporation. As a result, the personal assets of the shareholders of the LLC are protected if the LLC is sued, declares bankruptcy or is otherwise in debt. Based upon this limitation of liability, the LLC is frequently desired. In addition, the LLC receives favorable tax treatment by the Internal Revenue Service in that the LLC avoids what is known as "double taxation." Consequently, the corporation's earnings are not taxed; rather the income generated gets reported to the IRS as the shareholders' individual personal income. Moreover, the LLC offers additional advantages. First, there is no limitation on the number of shareholders an LLC may have. Secondly, the LLC is entitled to issue different types of stock. Finally, there is a high degree of flexibility in business management and distribution of earnings.