A limited liability company is a legal entity with liability protection similar to a corporation, but with fewer corporate formalities.
A limited liability company has one or members which may be individuals, partnerships, limited partnerships, trusts, estates, corporations, other limited liability companies or other business entities. The members are generally not personally liable for any debt, obligation, or liability of the limited liability company.
A limited liability company may engage in any lawful business activity, except banking business, the business of issuing insurance policies, or trust company business. In California, limited liability companies may not render professional services.
A limited liability company provides great management flexibility. It can be member-managed or manager-managed. A corporate style management structure may be adopted, with officers and managers that act as a board of directors. A limited liability company can choose to be taxed as either a corporation or as a pass-through entity. If treated as a pass-through entity, the income, loss, deductions, gain and credit are not taxed at the entity level, but are passed through to the members. The record keeping is less formal than a corporation. A limited liability company is not typically required to hold annual meetings or keep corporate minutes.