- Conceptually, a Limited Liability Company or an LLC is a hybrid between two familiar business structures, namely, a corporation and a partnership. An LLC combines the best of both worlds by offering the advantage of both a corporation and a partnership without the disadvantages of either form.
- A normal corporate structure, while avoiding unlimited personal liability of shareholders, leads to multilevel taxation of the earnings of the corporation as several countries tax corporate income at both the corporate level and the shareholder level (when the income is distributed to the owners of the company). A limited liability partnership avoids multiple taxation but it does require unlimited liability exposure of at least one general partner. Such exposure to risk is too great for an individual to assume and thus limits the usefulness of partnerships.