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What Does LLC Mean?

LLC is short for limited liability company. It's a type of legal business entity that was developed to provide business owners with a lower level of liability. According to the IRS, LLC owners face significantly lower caps on company actions and debts. In general this means that if the LLC has unpaid debts, creditors can only go after the assets of the company, and not the personal assets of the company owners.

Every state has a slightly different definition of what constitutes an LLC, but in general, all LLCs must be created by individuals or corporations who are legally capable of forming a business structure. Understanding the basics can help you to decide whether you want to form an LLC for your business.