limited liability company (LLC)
A legal entity seeking to realize the benefits of both a corporate and a partnership
legal structure. More than 40 states have enacted statutes authorizing this
form of legal entity. LLCs provide the liability protection afforded by corporations
(i.e., unlike a partnership, principals are not personally liable for the debts
and obligations of the organization) and offer the tax benefits afforded to
partnerships (i.e., they avoid double taxation and permit allocation of taxable
income and deductions). There are two key limitations associated with LLCs:
they are available only for privately held companies, and the equity interest
in an LLC is not freely transferable.
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PLI XIV.C