Limited Liability Companies Law & Legal Definition. A limited liability company is a hybrid between a partnership and a corporation. Like limited partnerships and corporations, the limited liability company has a separate legal entity from its members.. An LLC does not exist indefinitely.imited Liability Companies Law & Legal Definition. A limited liability company is a hybrid between a partnership and a corporation. Like limited partnerships and corporations, the limited liability company has a separate legal entity from its members.. An LLC does not exist indefinitely.