A hybrid business structure that combines features of partnerships and corporations
A sole proprietorship with limited liability
A non-profit organization
An LLC is a hybrid business structure that provides the limited liability of a corporation with the tax benefits of a partnership.
Questions & Step-by-step Solutions
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Q
Q: What is a limited liability company (LLC)?
Solution: An LLC is a hybrid business structure that provides the limited liability of a corporation with the tax benefits of a partnership.
Steps: 5
Step 1: Understand that an LLC stands for Limited Liability Company.
Step 2: Know that an LLC is a type of business structure.
Step 3: Learn that an LLC protects its owners from being personally responsible for business debts, which is called limited liability.
Step 4: Recognize that an LLC also allows profits to be taxed like a partnership, meaning the business itself doesn't pay taxes, but the owners do on their personal tax returns.
Step 5: Realize that this combination of limited liability and tax benefits makes LLCs a popular choice for many business owners.
