Hello YouTube, Todd Ault here, and Welcome to Wall Street Words! Today's Wall Street term is "Limited Liability Company" or LLC
"Limited Liability Company," a hybrid, the typical "Corporation" or "Partnership " LLCs has become very popular, their way of structuring a business so that your shareholders and yourself can have limited liability by owning the shares or units in an LLC; done commonly as a hybrid to a corporation or a sole proprietorship. Developed over the last 20 years, these are important business structures that can be set up for individuals to not be liable for the debts and obligations of the company they set up. Like an "Inc." (corporation), an LLC structures liability and protects the holders of the LLC. Hey, as a side note to an LLC, when I first set up my first hedge fund, it was an LLC. Why was it an LLC; because limited partnerships really were kind of out of vogue. An LLC created opportunities for you to have these things called "Side Pockets." You could have different LLC class interests. So, LLCs have become really popular, and allow you to do structures that you may otherwise not be able to do with limited partnerships. Definitely consult your tax attorney for LLC and how their tax and the decision and how you want to see taxation and talk to your lawyer about how to set up an LLC. But they're a great instrument, and I have a lot of them. I use them all the time. Today's word is "Limited Liability Company or LLC."
Definition - A limited liability company (LLC) is a business structure in the United States whereby the owners are not personally liable for the company's debts or liabilities. Limited liability companies are hybrid entities that combine the characteristics of a corporation with those of a partnership or sole proprietorship.
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