A limited liability company (LLC) is a business entity that enjoys the more attractive features of both a partnership and a corporation. It is similar to a corporation in that the liability exposure of individual members is limited to what each has invested in the business. An LLC is similar to a partnership in that it is taxed at only one level. Like a partnership, income passes through and is taxed against individual members as personal income. The exact tax implications of an LLC will vary between jurisdictions. An LLC is managed by members or a management team. You create an LLC by filing Articles of Organization with the business regulatory body in your jurisdiction. The document that governs the business relationship between the owners (members) of the LLC is called the 'Operating Agreement'. In most jurisdictions you do not have to file your Operating Agreement.
- - Texas Business Formation Learning Center