"Single vs Multi-Member LLC: Key Differences Explained"

The article compares Single-Member LLCs and Multi-Member LLCs, focusing on differences in tax classification, filing requirements, ownership structure, and profit distribution, highlighting their respective benefits and recordkeeping complexities. It provides a detailed guide to help business owners choose the suitable LLC type based on their needs.


Feature Single-Member LLC Multi-Member LLC
Tax Classification Default is "Disregarded Entity" treated as a sole proprietorship for tax purposes. Default is "Partnership" for tax purposes unless otherwise elected.
Tax Filing Requirements Reported on the owner's personal tax return using Schedule C, E, or F. Requires a separate partnership return (Form 1065) and Schedule K-1s issued to members.
Self-Employment Taxes Owner is subject to self-employment taxes on all net income. Members may be subject to self-employment taxes depending on their role and share of income.
IRS Elections Can elect to be taxed as an S Corporation or C Corporation. Can elect to be taxed as an S Corporation or C Corporation.
Ownership Structure Owned by one individual or entity. Owned by two or more individuals or entities.
Profit Distribution All profits go to the single owner. Profits are distributed according to the operating agreement.
Recordkeeping Complexity Simpler recordkeeping since there is only one owner. More complex recordkeeping due to multiple owners and allocation of profits.


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  • Filing-taxes-llc-guide

  • Irs-audit-llc-guide

  • Llc-electing-s-corp-benefits

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