A Limited Liability Company is similar to an S-Corporation, but with no eligibility criteria.  Some think the LLCs have the best of both worlds: personal asset protection, taxation choices (either as a partnership or as a corporation), and very flexible ownership rules.

I went to a website and pulled down the Frequently Asked Questions about LLCs and here is what I discovered:   http://www.bizfilings.com/learning/llcfaq.htm

What are the advantages of an LLC
LLCs offer numerous advantages.

Pass-Through Taxation : LLCs allow for pass-through taxation. This means that earnings of an LLC are taxed only once. The earnings of an LLC are treated like the earnings from a partnership, sole proprietorships and most S corporations.

Limited Liability: The LLC owner’s liability is generally limited to the amount of money which the person has invested in the LLC. Thus, LLC members are offered the same limited liability protection as a corporation’s shareholders.

Flexible Management Structure and Flexible Ownership is Permitted: Like general partnerships, LLCs are generally free to establish any organizational structure agreed on by its members. Thus, profit interests may be separated from voting interests.

Should I choose an LLC or an S corporation?
While the S corporation’s special tax status eliminates double taxation, it lacks the flexibility of an LLC in allocating income to the owners.
An LLC may offer several classes of membership interests while an S corporation may only have one class of stock.

Any number of individuals or entities may own interests in an LLC. However, ownership interest in an S corporation is limited to no more than 75 shareholders. Also, S corporations cannot be owned by C corporations, other S corporations, many trusts, LLCs, partnerships or nonresident aliens.

LLCs are allowed to have subsidiaries without restriction. S corporations are not allowed to own eighty percent or more of another corporation’s shares

What then, you might ask, are the disadvantages of an LLC over a sole proprietorship or an S-Corporation??  Well, money, of course.  Start up costs are about greater, and then it costs anywhere from $1,000 to $1,500 per year for accounting and income tax preparation.