Which business structure offers owners limited liability as well as flexible tax treatment?

The Limited Liability Company (LLC) is a business structure that effectively combines the benefits of limited liability protection with the flexibility of tax treatment. Owners of an LLC, known as members, are protected from personal liability for business debts and claims, which means that their personal assets are typically safe if the business incurs debt or is sued.

Additionally, LLCs offer flexible tax options. By default, an LLC is treated as a pass-through entity, meaning that income generated by the business is reported on the owners’ personal tax returns, avoiding the double taxation that corporations often face. This structure also allows LLCs to elect to be taxed as a corporation if that proves more beneficial. This combination of limited liability and flexible taxation makes the LLC a popular choice for many business owners.