Vertalis Business Law Glossary
Formation & Liability
Limited Liability Company
Also called: LLC.
By Tim Nichols
Modern Counsel for Growing Companies
In plain English
A state-law business entity combining a separate legal identity and general owner liability protection with flexible governance. Its owners are members, and their rights are governed by applicable law and the company agreement. An LLC's federal tax treatment can vary; the entity form alone does not determine it.
Types and key distinctions
Limited Liability
The principle that owners generally are not personally responsible for entity obligations solely because they own the business. It does not protect against every risk: personal guarantees, individual wrongful conduct, and specific statutes can create personal exposure. The company's own assets remain available for its obligations.