The LLC combines most of the favorable aspects of the partnership and corporation.
 

An LLC is a business entity, separate from its owners, that provides the LLC member with a limited amount of liability, which is usually only common to corporations.
 

In most cases, the Limited Liability Company is taxed as a partnership, passing its income and losses through to its members, avoiding the double taxation that is applicable to corporations.
 

Single member LLCs that do not elect to be taxed as a corporation will report the income from the activity on Schedule C, Schedule F, or Schedule E as appropriate.
 

The Limited Liability Company can alternatively elect to be taxed as a corporation.
 

Other attributes of the LLC will be determined by how the LLC is taxed. An LLC taxed as a corporation follows the corporation provisions and an LLC taxed as a partnership follows the partnership provisions.
 

The Limited Liability Company is formed under state law by filing Articles of Organization with the state.
 

An LLC's Articles of Organization usually define who will be responsible for managing the LLC.
 

Liquidation of the Limited Liability Company will depend on whether the organization is taxed as a partnership or corporation.
 

There is one major disadvantage of LLCs; they are a relatively new form of organization, which means there are still unresolved issues regarding their operation.