Definition: A statutory business entity whose owners are called members and generally receive protection from personal liability for the entity's obligations solely because they are members.
Example
Investors organize an LLC to own a rental property and document their management arrangements.
Keep the distinction clear
An LLC is not automatically an S corporation for tax purposes. Liability protection also does not excuse personal wrongdoing, guarantees, or separate professional registration requirements.
Related terms
Corporation · Limited Partnership · Sole Proprietorship
Keep studying
Corporation Sole, Sole Proprietorship, and Single-Owner Businesses
References: SBA: choosing a business structure · IRS: business structures · Florida Statutes 475.15: brokerage registration
Pronunciation (US): LIM-ih-tid lye-uh-BIL-uh-tee KUM-puh-nee; el-el-SEE (capitals show stress)
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