Glossary · People and paperwork
Limited Liability Company(LLC)
In short
A business structure that protects owners from personal liability for business debts. As a buyer, you'll likely form an LLC to own the acquired business, shielding your personal assets.
What it means in a deal
Most small business acquisitions, especially with an SBA 7(a) loan, involve forming a new LLC as the acquiring entity. This structure separates your personal finances from the business's liabilities, which is crucial for risk management. Ensure your legal counsel helps you set up the LLC correctly.
Related terms
Common questions about Limited Liability Company
- Are business life insurance premiums generally tax deductible for the company?
- Can an SBA 7(a) loan help me acquire another company?
- What distinguishes a company redemption from a cross-purchase buyout for SBA?
- Does my business need to be a for-profit company to qualify?
- Can the personal guaranty be limited for certain passive investors or minority owners?
- What if the primary business assets are specialized machinery with limited resale value?
Defined by CapBench SBA Intelligence — plain-English definitions for business buyers, lenders, advisors, and AI agents, grounded in public SBA rules and records. Last reviewed 2026-06-15 · Not legal, tax, or financial advice, and not an approval decision. Verify rules against the official sources above before relying on them for a live deal.
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