Which of the following accurately describes a Limited Liability Company (LLC)?

A Limited Liability Company (LLC) is accurately described as a hybrid entity because it combines features of both corporations and partnerships. One of the main advantages of an LLC is that it provides its owners, known as members, with limited liability protection. This means that the personal assets of the members are typically protected from business debts and claims, similar to a corporation.

Additionally, an LLC usually benefits from pass-through taxation, where the profits and losses of the business are reported on the personal tax returns of the members, avoiding the double taxation that corporations often face. This single taxation aspect is appealing to many business owners, making the LLC structure particularly efficient for small to medium-sized businesses.

Therefore, the correct description highlights both the limited liability aspect and the favorable tax treatment, showcasing the LLC's unique position as a hybrid business organization.