Forms, Limited Liability Company (LLC)

A Limited Liability Company (LLC) is a business structure allowed by state statute. In the US, each state may use different regulations, you should check with your state if you are interested in starting a Limited Liability Company.

Owners of an LLC are called members. Most states do not restrict ownership, so members may include individuals, corporations, other LLCs and foreign entities. There is no maximum number of members. Most states also permit “single-member” LLCs, which have only one owner.

A few types of businesses generally cannot be LLCs, such as banks and insurance companies. It will depend on your state’s requirements and the federal tax regulation. There are special rules for foreign LLCs.

Classification: Depending on elections made by the LLC and the number of members, the IRS will treat an LLC as either a corporation, partnership, or as part of the LLC’s owner’s tax return (a “disregarded entity”). Unless it files Form 8832 and elects to be treated as a corporation, a domestic LLC with one member is regarded as separate from its own, and a domestic LLC with at least two members is classified as a partnership. However, for purposes of employment tax and certain excise taxes, an LLC with only one member is still considered a separate entity.