property
limited liability company
A limited liability company (LLC) is a business entity that combines the liability protection of a corporation with the flexible management and pass-through taxation of a partnership. Its owners, called members, are generally not personally liable for the company's debts. LLCs are widely used to hold investment real estate because the entity can take title to property and members can transfer interests without deeding the land.
- Exam tip
- Exams contrast LLCs with general partnerships (unlimited personal liability) and corporations (possible double taxation). The LLC is a common answer for liability protection plus pass-through tax treatment.
- Example
- Three investors form an LLC to buy a 10-unit apartment building. If a tenant sues, the investors' personal homes are generally not at risk.
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Last verified: 2026-10-23