How does a Limited Liability Company (LLC) primarily protect its owners?

A Limited Liability Company (LLC) primarily protects its owners by shielding personal assets from business liabilities. This means that if the LLC faces legal issues, debts, or bankruptcy, the personal assets of the owners (also known as members) are generally protected from being used to satisfy business debts or claims. This limited liability feature is one of the main reasons individuals and businesses choose to establish an LLC, as it provides a layer of security for the owners’ personal finances.

While avoiding taxes and separate tax filings can be features of LLCs, they do not directly contribute to the protection of owners’ personal assets. Additionally, the concept of unlimited ownership refers to how many members can be part of an LLC and does not relate to personal asset protection. Overall, the shield against personal liability is a key characteristic of the LLC structure, making it an attractive option for many small business owners.