What does LLC mean at the end of a company name?

LLC stands for limited liability company and is a term that you may see often after the names of companies.

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A smiling man is sitting in a flower shop, looking happily at his tablet after starting an LLC.

by Lisa C. Johnson, Esq.
updated March 06, 2023 ·  3min read

If you like beer, you might be interested to know about a newly founded enterprise called Enjoy Beer LLC, calling themselves “a partnership of independent brewers uniting to grow our companies and celebrate beer culture.”

According to a BeerAdvocate article, the Boston based LLC “will create partnerships with additional top craft brewers who wish to preserve their local independence, while gaining shared resources in areas such as marketing, sales, purchasing, logistics, and finance in order to compete with large-scale corporate competitors.”

What does LLC mean in a company name?

You may have shifted your focus from beer to wondering what does LLC mean. Or not. If you haven’t shifted yet, then let’s go. What does LLC stand for? LLC stands for Limited Liability Company and is a term that you may see often after the names of companies.

Other names and abbreviations that indicate a limited liability company are: L.L.C., limited company, LC, L.C., Ltd. liability company, Ltd. liability co., and limited liability co.

What is an LLC?

Massachusetts’ Limited Liability Company Act allows this type of company to “carry on any lawful business, trade, profession, purpose or activity.”

The U.S. Small Business Administration (SBA) provides some good information about what an LLC means:

“A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership.

The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single individual (one owner), two or more individuals, corporations or other LLCs.

Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. Instead, all profits and losses are "passed through" the business to each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would.”

LLC meaning and history

According to The Uniform Law Commission (ULC), Wyoming became the first state to enact its own limited liability company act in 1977. In 1996, the Uniform Limited Liability Company Act [PDF] was approved by the ULC and recommended for enactment in all states. Most states did not adopt the model and the act was amended in 2006, 2011 and 2013, according to a recent summary [PDF]. However, it is a framework for states to follow.

The summary points out that in most every state, new LLC formations exceed that of corporate formations. Most states have their own statutes, so the rules may vary depending upon where you live and form an LLC.

An Internal Revenue Service (IRS) article states that there are few restrictions as to who can be a member. Members of a limited liability company can be one or more individuals, corporations, foreign entities and even other LLCs. However, generally banks and insurance companies cannot be LLCs. Certain states may have other restrictions as well.

As mentioned by the SBA, the IRS reiterates that members are taxed personally. A limited liability company is not a separate entity for tax purposes.

The big benefit of forming an LLC is limited personal liability. The SBA states that, “if the LLC incurs debt or is sued, members' personal assets are usually exempt. This is similar to the liability protections afforded to shareholders of a corporation. Keep in mind that limited liability means "limited" liability - members are not necessarily shielded from wrongful acts, including those of their employees.”

Public policy dictates that we want to encourage business formation and protect them to a certain extent. Yet, it also requires that a business whether an LLC or not, may not evade all responsibility. So if you celebrate your new LLC with some tasty craft beer, toast to your new venture and remember the designated driver.

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Lisa C. Johnson, Esq.

About the Author

Lisa C. Johnson, Esq.

Lisa Johnson is a Massachusetts attorney, freelance writer, and food blogger. Born in Boston, she currently resides in Q… Read more

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of the author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.