Limited liability companies, also known as LLCs, are the newest form of business entity and have enjoyed immense popularity since they hit the scene. They combine the pass-through taxation of a sole proprietorship or partnership (taxes on business income are paid on each owner's individiual income tax returns) with the protection against personal liability that corporations offer. It's often a very attractive alternative for business owners looking for liability protection and wanting to avoid the extra red tape and hassle of forming and operating a corporation.
An LLC, like a corporation, is a statutory creature, created and regulated by state law. It's fairly easy to form and operate an LLC although you will have to file LLC articles with the state and pay a filing fee. LLCs are a particularly good choice for single-owner or small businesses operated by a close-knit group of people who want to be able to run their business as they see fit without a lot of governance formalities.
Find out more about forming and running an LLC in this section.