Limited liability company
In accounting, limited liability company means a state-law entity whose owners (members) are shielded from its debts like shareholders. Federal tax has no LLC category: by default it is a partnership with two or more members and disregarded with one, and it is a C or S corporation only if it elects.
Also called LLC.
Authority: IRS — Limited liability company (opens in a new tab). Sources
The lessons that teach this
From the free founder back-office course, taught on one company's books, with exercises to work it yourself.
- EntitiesThe entity menu › Limited liability company (LLC)A state-law shield with no federal tax category of its own: disregarded, a partnership, or a corporation by election.5 min
- EntitiesConverting an LLC to a C corporation › Check-the-box electionForm 8832 changes the tax classification and nothing else — and locks it for 60 months.3 min
- EntitiesChoosing an entity in practiceA decision table by goal — raise VC, bootstrap, consult, side project, real estate — and why Northwind is a Delaware C corporation.8 min
For founders
The same idea written for a founder: what it costs a startup that ignores it, and what to do in a real month.
- W-9s and backup withholding: a vendor onboarding guideWhen to ask for a W-9, how IRS TIN matching works, and what happens when a vendor won’t give you one: 24% backup withholding, owed by you.
- Form 1099-NEC for startups: threshold, deadline, e-filingWho gets a 1099-NEC, the new $2,000 threshold, why a W-9 comes first, what goes on a 1099-K instead, and the deadlines, penalties and state copies.
- Startup tax deadlines by month for a C-corpFederal tax deadlines for a calendar-year C-corp, month by month: W-2s, 1099s, Form 941, Form 1120, estimated taxes and Delaware franchise tax.
What it is not called
Each of these means something else. Use one here and an accountant reading the product notices.
- limited liability corporation
- an LLC tax return
Components that render the terms it depends on
No component names this concept outright, but it's built from terms that components do name. These render liability.
Also in Entity types
Defined in Lexicon. This page is generated from that document, so the two can't disagree.