Limited liabilities companies have rapidly become one of the most popular business entity types for new and small businesses, largely because they are considered to be simpler and more flexible than a corporation. The LLC business structure combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation, creating the best of both worlds for business owners. This means that if you choose to form an LLC, your business will become it's own legal entity that has separate debts and legal matters. However, LLCs are still tied to your personal taxes.