What is a limited liability company (LLC)?

A limited liability company (LLC) is indeed a business structure designed to provide its owners, also known as members, with limited liability protection. This means that members are typically not personally responsible for the debts and liabilities of the business, which helps to protect their personal assets in case of business-related legal issues.

Additionally, LLCs offer tax advantages. They often allow for pass-through taxation, where the business income is reported on the members' personal tax returns, avoiding the double taxation typically associated with traditional corporations. This combination of limited liability and favorable tax treatment makes LLCs an appealing option for many business owners.

The other options highlight characteristics that do not align with the definition or structure of an LLC. A sole proprietorship does not provide liability protection, a traditional corporation tends to impose full liability on its shareholders in some contexts, and a non-profit organization does not inherently offer personal liability protection in the same way that an LLC does. Thus, the definition provided in the correct answer (option B) accurately encapsulates the nature and advantages of a limited liability company.