Which statement about an LLC is true?

Which statement about an LLC is true?

• A. Separates personal assets from company assets.
• B. It requires public stock offerings.
• C. It has no legal filing requirements.
• D. It cannot be used for professional services.

Answer: (A)

An LLC provides limited liability, meaning owners’ personal assets are generally protected from the business’s debts and lawsuits. This separation is the core benefit: it reduces personal financial risk if the company runs into trouble, though it isn’t absolute—fraud, personal guarantees, or ways of co-mingling funds can undermine it. Public stock offerings aren’t part of an LLC’s structure, since LLCs don’t issue stock like corporations do. And LLCs do have legal filing requirements, such as submitting Articles of Organization to the state to form the entity. Plus, LLCs can indeed be used for professional services (often as a PLLC where required by state rules). So the statement about separating personal assets from company assets correctly captures the defining feature of an LLC.

An LLC provides limited liability, meaning owners’ personal assets are generally protected from the business’s debts and lawsuits. This separation is the core benefit: it reduces personal financial risk if the company runs into trouble, though it isn’t absolute—fraud, personal guarantees, or ways of co-mingling funds can undermine it.

Public stock offerings aren’t part of an LLC’s structure, since LLCs don’t issue stock like corporations do. And LLCs do have legal filing requirements, such as submitting Articles of Organization to the state to form the entity. Plus, LLCs can indeed be used for professional services (often as a PLLC where required by state rules). So the statement about separating personal assets from company assets correctly captures the defining feature of an LLC.