An “entity” and a “Limited Liability Company (LLC)” are related concepts, but they have distinct meanings and serve different purposes in the context of business and legal structures.

Here are the key differences between the two:

1. Entity:
   • General Meaning: In a broad sense, an “entity” refers to any organization, individual, or thing that exists and can be identified as a distinct and separate unit. It is a generic term used to describe separate and identifiable entities in various contexts.
   • Application: The term “entity” can be applied in different contexts, such as legal entities (e.g., corporations, LLCs), government entities (e.g., government agencies), data modeling (e.g., database entities), or even philosophical discussions (e.g., metaphysical entities).
2. Limited Liability Company (LLC):
   • Legal Structure: An LLC is a specific legal structure for businesses that combines elements of a partnership and a corporation. It is a formal business entity recognized by state laws in the United States.
   • Limited Liability: One of the primary features of an LLC is limited liability protection. Members (owners) of an LLC typically have their personal assets protected from the business’s debts and liabilities, meaning their personal assets are generally not at risk in case of business losses or legal issues.
   • Flexibility: LLCs offer flexibility in management and taxation. Members can choose to be taxed as a partnership (pass-through taxation) or as a corporation, depending on their preferences and tax considerations.
   • Ownership: LLCs can have one or more members (owners), and ownership is typically expressed through membership interests.
   • Governance: LLCs are managed by their members, known as member-managed LLCs, or by appointed managers, known as manager-managed LLCs.
   • Legal Formalities: LLCs require less formal record-keeping and reporting compared to corporations, making them an attractive option for small and medium-sized businesses.

In summary, while “entity” is a generic term used to describe separate and distinct units or organizations in various contexts, an LLC is a specific legal entity structure used for business purposes. An LLC offers limited liability protection to its members and provides flexibility in terms of management and taxation. When people refer to an “entity” in the context of a business or legal structure, they may be referring to a specific type of entity, such as an LLC, corporation, or partnership, depending on the legal structure chosen for their business.