An LLC is a Limited Liability Company. An LLC is a hybrid entity that can be operated by one person, like a sole proprietorship or operated by multiple people, like a partnership. While LLCs are not corporations, they do provide some of the same legal protections as a corporation without some of the restrictions. Owners are shielded from personal liability through the use of an LLC by keeping company assets and debts separate from the assets and debts of the owner or owners.

Because an LLC is not a corporation it is treated as a “pass through” entity for tax purposes and all profits and losses are taxed once on an individual level, although the entity itself may also be taxed by the state as either a partnership or franchise. In Washington, forming an LLC is a multi-step process that can be completed online or via mail.

Since an LLC is just one of the many business entities you may select to use during the formation or restructuring of your business, we would suggest that you explore the benefits and draw backs of each of your options before settling on a specific form.