A limited liability company (LLC) is a type of business entity you can register in your state. The main purpose of an LLC company is to limit the personal liability of its owners—like a C corporation or S corporation—but it also allows the business to operate with simpler, more flexible tax requirements.

As a unique business entity type within the industry, LLCs also have the added benefit of flexible taxation; for federal taxes, an LLC is taxed as a pass-through-entity (like a sole proprietorship, partnership, or S corporation) by default, but it can also elect to be taxed as a C corporation. This flexibility lets an LLC’s members (another term for owners) find the taxation structure that works best for their finances, all while staying completely legal. LLCs’ unique product in the corporate world includes potential tax savings and personal liability protection, which are just a few of the numerous benefits of an LLC.