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What are Limited Liability Companies?
A Limited Liability Company, also referred to as an “LLC,” is a new class of business operating entity with legal status in certain states (see below) – a hybrid between an S corporation and a partnership. It combines the tax advantage of a partnership (avoidance of corporate income tax) with the legal safeguard of a corporation – namely the fact that owners’ personal assets are not normally at risk in business-related lawsuits.
As of December 1997, all states, plus the District of Columbia, have passed laws governing the administration and operation of LLCs within their jurisdictions.
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