Both LLCs and Subchapter S companies are "pass-through" entities, whose owners have only "limited liability" for the business's obligations.

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Both LLCs and Subchapter S companies are pass-through entities, meaning that the income and losses of the business are passed through to the owners' personal tax returns. Additionally, both provide limited liability protection for their owners, meaning that the owners' personal assets are generally not at risk for the business's obligations.

Both LLCs and Subchapter S Companies Are "Pass-Through" Entities, Whose