A Limited Liability Company (LLC) is a business which is an extremely flexible form of business structure. It combines rudiments of a typical corporation and partnership structures. By establishing an LLC, you develop a legal unit that offers limited liability to its owners.
It has been observed that most of the times, these are incorrectly termed as Limited Liability Corporation instead of Limited Liability Company. Retail Rhino LLC, is a limited liability company and can give you more insight into the functioning of an LLC.
It is actually a hybrid business entity that comprises of features and/or characteristics of corporations, exclusive proprietorships and even partnerships, based on the number of owners that are involved in the Limited Liability Company.
An LLC, is essentially a type of unincorporated business and is not a corporation even though it is a business entity. The key feature that is similar in both LLC and a corporation is the limited liability protection that they both provide. Pass-through income taxation is the main feature that an LLC shares with a corporation.
LLC is however, is very well suitable for single owner businesses as it is much more flexible than a corporation. But you must understand the fact that neither corporations nor limited liability companies always defend owners from liability.
Flexibility and Default Rules
All LLC legal statutes comprise of an expression similar to "unless otherwise provided for in the operating agreement" which provides the flexibility to the members of an LLC in deciding how their LLC will be administered. Unless and until an operating treaty has been adopted, the statutes follow the default rules for the governance of an LLC that are in effect.