What type of business structure offers members limited liability for company debts?

The correct choice is a Limited Liability Company (LLC) because it is specifically designed to provide its members with limited liability protection, meaning that the personal assets of the members are generally protected from business debts and liabilities. In the event that the LLC incurs financial obligations or is sued, the members’ personal assets, such as their homes or personal bank accounts, typically cannot be pursued to satisfy the debts of the company.

This structure blends characteristics of both corporations and partnerships, offering flexibility in management and tax benefits while ensuring that members are not personally liable for the company’s debts. This limited liability feature is one of the primary advantages that attracts business owners to choose an LLC as their business structure, providing peace of mind compared to other forms of business organizations.

In contrast, a sole proprietorship does not offer any personal liability protection; the owner is personally responsible for all debts. Similarly, a partnership can expose partners to personal liability for the debts incurred by the business, depending on the specific type of partnership. While a corporation also offers limited liability protection, it typically involves more regulatory requirements and formalities compared to an LLC.