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After electing corporate tax status, an LLC may further elect to be treated as a regular C corporation (taxation of the entity's income prior to any dividends or distributions to the members and then taxation of the dividends or distributions once received as income by the members) or as an S corporation (entity level income and loss passes through to the members).Some commentators have recommended an LLC taxed as a S-corporation as the best possible small business structure.
The written LLC operating agreement should be signed by all of its members.
It is a business structure that can combine the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.
An LLC is not a corporation under state law; it is a legal form of a company that provides limited liability to its owners in many jurisdictions.
This article is about the United States of America-specific business entity form.
For limited liability companies, see Limited company.