Which of the following is a basic characteristic of an LLC?

The characterization of an LLC as having limited liability, limited liquidity, limited life, and limited tax is accurate and captures the essential features of this type of entity. Limited liability is a hallmark of LLCs, protecting members from personal liability for the company's debts and obligations, similar to shareholders in a corporation.

In terms of limited liquidity, it’s generally more challenging to transfer ownership in an LLC compared to publicly traded corporations, as transfers typically require the consent of other members. This speaks to the nature of the entity which is not designed for easy trading of ownership interests.

Limited life signifies that an LLC can be dissolved upon certain events, such as the withdrawal of a member, unless otherwise stipulated in the operating agreement, which contrasts with the perpetual existence that corporations enjoy.

The term "limited tax" reflects the flexibility of LLCs concerning taxation. An LLC may choose to be taxed as a partnership or a corporation, potentially allowing for pass-through taxation, where profits are taxed only at the member level, avoiding double taxation.

By encompassing these characteristics, the choice accurately depicts the foundational aspects of an LLC, making it the correct answer.