LLC
Limited Liability Company - a business structure with liability protection.
A Limited Liability Company (LLC) separates personal assets from business liabilities while offering flexible tax treatment. Single-member LLCs are taxed as sole proprietorships by default; multi-member LLCs as partnerships. LLCs can also elect S-corp or C-corp taxation. Formation requires filing articles of organization with the state and is typically straightforward and affordable.
Example
A graphic designer forms an LLC, protecting her personal savings and home from liability if a client sues the business over a contract dispute.
Why It Matters for Your Business
An LLC shields your personal assets from business lawsuits and debts, providing crucial protection that a sole proprietorship cannot offer.
Related Terms
More Business Terms
Accounts Reconciliation
Ensuring account balances match between different records.
Break-Even Point
The sales volume at which revenue equals costs.
Budget
A financial plan estimating income and expenses.
Financial Forecast
A prediction of future financial performance.
Capital Expenditure
Funds used to acquire or upgrade physical assets.
Related Financial Guides & Resources
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