LLC stands for Limited Liability Company. It's an entity created by state statute that protects its owners from personal liability for the company's debts and obligations.

Most small businesses and entrepreneurs can form an LLC entity. LLC's are a good choice if you want to protect your assets without the complex structure and formalities of a corporation. If your business plans to hold property that appreciates in value, such as real estate, then it would be a huge benefit to form an LLC.

The only businesses that cannot form an LLC are businesses that are in the banking, trust, or insurance industry. In addition, state licensed professionals such as doctors, lawyers, or accountants should not form an LLC. Instead, these professionals may benefit from creating a Limited Liability Partnership or a Professional Corporation.

An LLC can be started by one person and there is no maximum number of people needed to form the LLC. The owners of an LLC are known as members. LLC members can be individuals, corporations, other LLCs, or foreign entities.

The main differences between an LLC and a corporation are taxation, management and ownership structure.

Taxation - an LLC that is a pass-through entity has the business profits flow to the owners before taxes. In contrast, a corporation can be taxed at the company level before distributing profits to shareholders, unless the corporation elects to be treated as an S-corporation with IRS using form 2553.

Management - LLC is more flexible to manage than a corporation. An LLC is managed by its members (owners) or by selected managers, whereas a corporation is managed by Board of Directors and Officers.

Ownership - LLC is owned by individual members, whereas a corporation is owned by shareholders.

S-corporations and LLCs are similar in that they are both "pass-through" entities for tax purposes. The profits of these companies are passed through to their owners and reported on the owners’ personal income tax returns, thereby eliminating the double taxation incurred by owners of a standard C corporation.

The differences between an LLC and S-corporation are ownership restrictions, employment tax, and flexibility of profit sharing. An LLC can have an unlimited number of owners, whereas a S-corporation can have up to 100 owners (shareholders). In addition, an LLC has flexibility in how profits are shared among owners, unlike corporations where profit sharing is typically tied strictly to ownership percentages.