What is the primary feature of a limited liability company?

The primary feature of a limited liability company (LLC) is that the business entity is liable for the company's debts. This means that the owners, often referred to as members, enjoy limited liability protection, which shields their personal assets from being used to satisfy business debts and obligations. In the event that the LLC faces financial struggles or is sued, creditors typically cannot pursue the personal assets of the members to cover the debts of the company.

This limited liability aspect is a significant advantage of forming an LLC, as it provides a legal separation between the owners' personal finances and the liabilities of the business. It allows individuals to invest in and run a business without jeopardizing their personal assets, distinguishing the LLC from other business structures where the owners may bear personal liability for business obligations.