single/multi member llc
what is the difference between a single member llc and a multi member llc
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08/20/10 10:43am PDT
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A member in an LLC is like a partner in a partnership, or a shareholder in a corporation. So, a single-member LLC has just one member (or partner) to whom the business' income flows, and a multi-member LLC has more than one member that share profits, losses, and capital according to percentages laid out in your LLC agreement.
There are various subtle tax issues based on the number of members in an LLC. For instance, a single-member LLC is considered a disregarded entity for tax filing purposes. As a result, you do not file a separate tax return for the LLC; instead, you report the activity on the member's Form 1040 Schedule C. With a multi-member LLC, you file a separate tax return for the business (Form 1065) and the members each receive a Form K-1 that shows their share of profits, losses, and capital.
So the short answer is, if you're the only owner of your business, you have a single-member LLC. Otherwise, it's multi-member.
