Definition:
An LLC, or Limited Liability Company, is a U.S. business entity type that offers limited personal liability protection and flexible tax treatment. It is a popular choice among both U.S.-based and non-resident entrepreneurs due to its ease of formation and maintenance.
LLCs are considered separate legal entities from their owners (members), meaning personal assets are generally protected from business debts and lawsuits. By default, LLCs are treated as “pass-through” entities for tax purposes—profits pass directly to members and are reported on personal tax returns. However, LLCs can elect to be taxed as a C-Corporation or S-Corporation.
LLCs also offer flexible management options. They can be managed directly by members (member-managed) or by designated managers (manager-managed), as outlined in the company’s Operating Agreement.
Who is it for?
LLCs are ideal for small-to-medium-sized businesses, freelancers, consultants, e-commerce entrepreneurs, and non-U.S. residents looking to forming a legal presence in the United States.
