A limited liability company (LLC) is a business entity that provides its owners with the limited liability protection of a corporation, while allowing earnings to pass through to the owners for tax purposes. Thus, an LLC combines the best features of a corporation and a partnership while not being classified as either one. Instead, it can be best characterized as an unincorporated association that requires much less paperwork than a corporation.
A limited liability company is frequently used when there are few owners, or just one owner. An LLC is not allowed in some states for certain purposes, such as the provision of professional services.