A limited liability company – aka “an LLC” – is a type of business entity that is used by many real estate investors. Before companies “form” an LLC they are typically a sole proprietorship. The problem with sole proprietorships is that they don’t protect their owners’ personal assets. That’s why so many business owners register their business through the state.
An LLC is a super common entity that real estate investors will form when they acquire property. Owners of an LLC are called members. The difference between a sole proprietorship and an LLC is that the personal assets of LLC members are protected from creditors.
That means creditors (suppliers, people suing the biz etc) can only reach the $$$ that exists within the business, and can’t touch your personal accounts.
If you’d like to read a bit more about LLCs check out our page here.