Introduction: What Is a Limited Liability Corporation?
If you’ve searched what is a limited liability corporation, you’re not alone. Many new entrepreneurs use this phrase when referring to a Limited Liability Company (LLC)—but here’s the truth:
A “Limited Liability Corporation” doesn’t technically exist.
The correct legal term is Limited Liability Company (LLC), not corporation. However, since the phrase is commonly misunderstood and used interchangeably, it’s important to clarify the difference and explain what people really mean when they say “limited liability corporation.”
What People Mean by “Limited Liability Corporation”
Most people asking what is a limited liability corporation are referring to an LLC—a hybrid business structure that combines the limited liability protection of a corporation with the flexibility and simplicity of a sole proprietorship or partnership.
So, while the term may be inaccurate legally, the intent is clear: you’re looking to understand what an LLC is and how it protects business owners.
What Is a Limited Liability Company (LLC)?
A Limited Liability Company (LLC) is a legal business entity that:
- Protects personal assets of its owners (called members)
- Separates business liabilities from personal finances
- Allows flexible taxation (you can choose to be taxed as a sole proprietorship, partnership, S Corp, or C Corp)
- Requires less paperwork and fewer formalities than a corporation
LLC vs Corporation: What’s the Difference?
| Feature | LLC (Limited Liability Company) | Corporation (Inc. or Corp.) |
|---|---|---|
| Legal Structure | Separate legal entity | Separate legal entity |
| Ownership | Members | Shareholders |
| Management | Member-managed or manager-managed | Board of directors & corporate officers |
| Taxation | Pass-through or corporate taxation | Double taxation unless S Corp election |
| Formal Requirements | Minimal | Strict (annual meetings, bylaws, etc.) |
So, if you’re wondering what is a limited liability corporation, you’re likely describing an LLC, not a corporation.
Why Form an LLC?
Forming an LLC is one of the most popular choices for small business owners because it offers:
- Legal protection for personal assets
- Tax flexibility
- Simple compliance requirements
- Professional business image
How to Start a Limited Liability Company (LLC)
- Choose a business name
- File Articles of Organization with your state
- Appoint a registered agent
- Create an Operating Agreement
- Get an EIN from the IRS
- Open a business bank account
You can start your LLC today at FormLLC.us — quick, affordable, and done-for-you.
Final Thoughts
To summarize:
“Limited Liability Corporation” is not a formal term, but it’s commonly used when referring to a Limited Liability Company (LLC).
If you’re searching what is a limited liability corporation, what you’re really looking for is the protection, simplicity, and flexibility that an LLC offers.
