What type of business structure offers limited liability for its owners?

A limited liability company (LLC) is a hybrid business structure that combines features of both corporations and partnerships. One of the most significant advantages of an LLC is that it offers limited liability protection to its owners, who are referred to as members. This means that the personal assets of the members are typically protected from business liabilities and debts. If the LLC faces financial difficulties or is sued, the personal assets of the members, such as their homes or personal bank accounts, are generally not at risk.

This structure is particularly appealing for entrepreneurs and small business owners because it provides flexibility in management and taxation while also protecting the personal liability of the owners. This limited liability feature encourages individuals to invest in or start businesses without the fear of losing their personal wealth due to business risks.

In contrast, sole proprietorships and general partnerships do not offer such protection, as the owners are personally liable for all business debts and obligations. Corporations also provide limited liability, but they typically involve more complex regulations and ongoing compliance requirements than an LLC.