A limited liability company (LLC) is a business structure that limits the personal liability of its owners. It combines the flexibility and pass-through taxation of a sole proprietorship or partnership with the limited liability of a corporation. An LLC may be organized for profit or as a non-profit entity (e.g. charity, religious organization).
The owners of an LLC are called members and they share in the profits and losses of the organization on their personal tax returns.
In the US, an LLC is considered to be a flow-through entity for tax purposes, meaning that it "passes through" income and losses to its members who then report these on their personal tax returns. This results in lower administrative costs compared to forming an S corporation or C corporation and paying corporate taxes separately from personal taxes.