Limited Liability Company: This type of entity has grown enormously popular as it essentially combines the flexibility and tax advantages of a partnership with the liability protection of a Corporation. Similar to a limited partnership, the members of the Limited Liability Company limit their risk in the venture to the amount contributed to the company. However, unlike the limited partnership and much like a corporation, members may actively participate in the management and affairs of the company without jeopardizing their limited liability status. An LLC does not require the corporate formalities and is designed to avoid double taxation and permit pass-through of income and losses for tax purposes. It is an extremely flexible business structure and has become the entity of choice for many persons.