Originally posted by Manish Hatwalne: What's the difference between a company that's LLC and one that's Inc? - Manish
Its my understanding that a LLC is a type of partnership somewhere between a regular partnership (unlimited liability for all partners) and a more corporate type entity (in terms of liability). Hence the name, Limited Liability Corporation.
The LLC is not a corporation, but it offers many of benefits of a corporation. Many small business owners and entrepreneurs prefer LLC�s because they combine the limited liability protection of a corporation and the pass through taxation of a sole proprietorship or partnership. The downside to an LLC is that it does not offer the free transferability of ownership, perpetual existence, and the ability to be totally owned by a single individual that one gets with a corporation.
Partnerships are taxed in the same manner as LLCs. However, members of a partnership may have greater exposure to the liabilities of the partnership. The members of a general partnership and the general partners of a limited partnership are fully liable for the debts and obligations of the partnership.