What are limited liability companies?

The limited liability company (“LLC”) is an entity that combines the tax advantage of a partnership (single level of tax) with the limited owner liability advantage of a corporation, even if the owner(s) participate in the management of the company. LLC’s have the following advantages: limited liability protection and certain tax advantages. LLC’s do, however, have some drawbacks, for example the operating agreement must be carefully drafted to set forth how the LLC is being operated.