An LLC is a limited liability company that is formed by the owners, called members, to run and operate a business. LLCs are like partnerships and require the business to file articles of organization with state authorities.
An LLC partnership allows its members to function under an operating agreement that is reached between them before they commence business. This agreement clearly spells out the responsibilities and financial stake of each of its members, and also how the business will function. It takes into consideration various situations that can arise during the conduct of the business and how each of the will be dealt with.
LLCs are set up specifically to ensure that all its owners or members have liability protection. The limited liability separates the business from the personal affairs of each member and leaves them liable only for the debts incurred by the business itself.