Limited Liability Company
Updated: 15 November 2024
What Does Limited Liability Company Mean?
A limited liability company (LLC) is a type of company where the members are not personally responsible for its debts and liabilities. While LLC status helps reduce risk, many companies still purchase business insurance to cover any remaining risks.
Insuranceopedia Explains Limited Liability Company
Limited liability companies (LLCs) are not taxed like corporations. Instead, the income drawn by LLC owners is taxed as personal income.
Although LLCs provide limited liability, protecting owners from being held personally responsible for company debts, the business can still face lawsuits. To safeguard against the financial impact of a costly lawsuit, LLC owners should obtain commercial insurance, which can help prevent the need to file for bankruptcy.
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