What is a limited liability company (LLC)?

A limited liability company is an unincorporated business organization offering limited liability to its owners. Inspired by a type of business organization in Germany known as the GmbH, the LLC was first introduced in the U.S. by the state of Wyoming 30 years ago. Yet only since 1988, when the IRS provided guidance on LLC tax treatment, have they been widely used in the U.S. Often incorrectly called a "limited liability corporation", the LLC is an entity that most often combines the best aspects of both corporations and partnerships.

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