What is a primary benefit of forming a limited liability company (LLC)?

Forming a limited liability company (LLC) provides a primary benefit of limiting personal liability for business debts. This means that the owners, known as members, are generally not personally responsible for the debts and liabilities of the LLC. In other words, if the business incurs debts or is sued, the personal assets of the members are typically protected. This safeguard encourages entrepreneurship by providing a layer of security, allowing individuals to take business risks without jeopardizing their personal finances.

The other options do not align with the key advantages of forming an LLC. Increased governmental oversight is generally not seen as a benefit; in fact, many business owners seek to minimize oversight where possible. Issuing stocks to the public is a feature associated with corporations, not LLCs, which do not have shareholders in the same capacity. Lastly, while LLCs can have favorable tax treatment, they do not eliminate all tax obligations, as members are still responsible for paying taxes on income derived from the business.