The Limited Liability Company (LLC) is a legal entity that has many similarities to an S-corporation. The LLC owners are called ‘members’; even though many people use the ‘shareholder’ term. While providing personal liability protection to its owners and ‘pass through’ taxation, an LLC has flexibility on various issues that an S-corporation is restricted (i.e. on the number of shareholders). In certain cases, an LLC could choose to be taxed as a corporation; such a decision depends on state laws and the nature of the business entity.

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