Since the 1990s, individuals who wish to form businesses have seen a significant increase in the types of business entities that may be formed. Laws governing these newer forms of businesses limit the liability that business owners may face. In general, a person who invests in a limited liability entity is only liable for an amount equivalent to the investment made by the investor.
Some limited liability entities resemble general partnerships, except for the limitations in liability. Other entities, especially limited liability companies, are more similar to corporations in their structure. Although some entities are taxed in a manner similar to partnerships, other forms of limited liability entities may be taxed similar to corporations.