A limited liability company is a form of business organization combining elements of limited partnerships and corporations.

All partnerships consist of individuals who have agreed to run a business together under the terms of a partnership agreement.  A general partnership typically does not provide its individual partners with limited liability from lawsuits and debts. 

Unlike a general partnership, all members in a limited liability company are shielded from the wrongful acts or negligence of other members or managers.  All  members and managers in a limited liability company have limited liability from errors, omissions, negligence, incompetence, or malpractice committed by other members or managers, just as in a corporation.  In addition, unlike a corporation, a limited liability company has the beneficial tax treatment of a partnership: it is a pass-through entity that does not pay federal income tax and avoids “double taxation” on income earned by the corporate entity and the corporate entity shareholders.

A For certain businesses, a limited liability company offers the best combination of the beneficial characteristics of partnerships and corporations:  

An LLC “offers the best of both worlds — the limited liability of a corporation and the favorable tax treatment of a partnership.” Canterbury Holdings, LLC v. Comm’r, 98 T.C.M. (CCH) 60, 61 n.1 (2009).  Generally, an LLC is a pass-through entity that does not pay federal income tax.  See I.R.C. § 701Treas. Reg. § 301.7701-3(a). Rather, profits and losses “pass through” the LLC to its owners, called members, who pay individual income tax on their allocable shares of the tax items.  See I.R.C. §§ 701-046031.

Historic Boardwalk Hall, LLC v. Comm’r, 694 F.3d 425, 429 n. 1 (3rd Cir. 2012).

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Sources:  https://www.thebalancesmb.com/how-to-form-a-limited-liability-partnership-398325.