The limited liability company, or LLC, has become an enormously popular business vehicle and for good reason. The LLC combines the shareholder protections traditionally associated with corporations with the "pass through" tax treatment traditionally associated with partnerships—and to this attractive combination adds a unique degree of flexibility. However, the LLC, which is generally treated as a partnership for tax purposes, can create serious traps for those unfamiliar with the intricacies of partnership taxation. For example, if the agreement among the members does not reflect the special rules governing allocations of partnership income and loss, the members may find their entire economic arrangement turned upside down. In addition, the structure of the LLC will determine whether other taxes apply, such as tax on self-employment income. Our tax attorneys have the knowledge and experience required to realize the potential of this innovative business tool.