What is a Single-Member LLC (SMLLC)?

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A Single-Member LLC, abbreviated SMLLC, is an LLC with just 1 owner. An LLC owner is referred to as a Member, hence the name “single member” LLC. The purpose of forming an LLC is to protect the personal liability of the owners. Forming an LLC separates your personal assets from that of the business.

All 50 states allow for Single-Member LLCs and this is the most popular type of LLCs formed in the United States.

A Single-Member LLC can be owned by an individual person, or it can be owned by an existing company, such as another LLC, a Corporation, or any other legal entity.

A Single-Member LLC can also be owned by a non-US citizen or non-US resident. There are no residency or citizenship requirements for the ownership of LLCs, whether the LLC’s are Single-Member LLC or Multi-Member LLCs.

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Taxes & Single-Member LLCs

By default, a Single-Member LLC is treated as a “disregarded entity” by the IRS for federal tax purposes.

This means you will pay taxes the same way as a Sole Proprietorship does. The LLC will report its income or losses on a schedule C, which will become a part of your personal 1040 income tax return. If your income is earned by other means, you may also have to attach additional schedules to your personal income return.

Please keep in mind we said “pays taxes the same way as“. A lot of people get confused by this and think that their LLC is a Sole Proprietorship. At the state level, your LLC is simply an LLC; a legal entity formed by state statute. However, the IRS does not have a tax classification for LLCs, so the IRS just taxes the LLC according to the number of Members the LLC has.

Sole Proprietorship taxation is the default tax classification for LLCs with 1 owner. Alternatively, if you’d like your Single-Member LLC to be taxed as an S-Corp, you can do so via IRS Form 2553, or if you’d like your Single-Member LLC to be taxed as a C-Corp, you can do so via IRS Form 8832. If you are thinking about electing either form or “corporate taxation” for your LLC, we strongly advise you speak with multiple accounts in your state. Just ring a few up back to back to get a few different opinions. Often times, these types of taxation are not as simple as some articles lead you to believe.

How to pay yourself in a Single-Member LLC?

If you leave your Single-Member LLC in its default tax status as a Sole Proprietorship with the IRS, you will not be taking a salary from the company, but instead you will be taking distributions (which are subject to self-employment taxes).

If your Single-Member LLC elects to be taxed as an S-Corp with the IRS, then you will have to take a reasonable salary, pay payroll taxes, and file a corporate 1120S tax return every year.

In order to put money into the LLC you will make what are called Capital Contributions. And in order to take money out of the LLC, you will take what are called Capital Distributions.

Can I get an EIN for a Single-Member LLC?

Yes, you can obtain an EIN – also known as a Federal Tax ID Number – from the IRS for your Single-Member LLC. You will use your EIN to open your business bank account, obtaining financing, file certain taxes, and for some business licenses and permits.

How to Form a Single-Member LLC?

You will form a Single-Member LLC the same way you would form any LLC; you will file Articles of Organization (or similar form; like Certificate of Organization or Certificate of Formation) with the Secretary of State in the state where you’re forming your LLC. For example, if you’re forming a Single-Member LLC in California, you will file an Articles of Organization with the California Secretary of State.

There are no states which have a different Articles of Organization for Single-Member LLCs, however some states’ Articles of Organization will have a checkbox where you will designate whether or not your LLC is Single-Member.

To form your Single-Member LLC, you can follow our free LLC formation guides, which we have provided for all 50 states. To learn more about LLCs, check out our LLC Learning Center.

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Matt Horwitz
Founder & Educator at LLC University
Forming an LLC shouldn't be so complicated. Our step-by-step guide will make the process a breeze – and no complex legal jargon! We teach people how to form an LLC for free in all 50 states. We hope you find our free guides and resources helpful in your entrepreneurial journey.
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6 Comments

  1. Bob April 16, 2018

    Hi Matt,

    Is a Manager-Managed Single-Member LLC with 2 manager’s but only one member, still considered a disregarded entity? That was my intention when filing.

    Thanks!

    reply
    • Matt Horwitz April 17, 2018

      Hey Bob, it’s all about the LLC Members. So yes, an LLC with 1 Member (regardless of management or number of Managers) is still a disregarded entity. Hope that helps!

      reply
  2. Kiran Borkar June 12, 2018

    We (my wife and I) live in Illinois and has a living trust(joint with my wife and I and my home in Illinois is part of my living trust. Recently, I bought an investment property in Tracy, CA. The investment property is owned jointly by my wife and I. I am interested in forming LLC and have the living trust be member of LLC. What is the best way to add my investment property to my living trust(is that like a sub trust) and be member of LLC. what will be my liability against lawsuits for my investment property in California – is my primary residence in Illinois available for lawsuit. For taxes, is it still filing taxes for my LLC using my personal taxes

    reply
    • Matt Horwitz June 18, 2018

      Hi Kiran, we do not work with trusts, so don’t know the answers to your questions. I recommend speaking with a few real estate attorneys for assistance. Thank you for your understanding.

      reply
  3. Ana Resto July 20, 2018

    Hello!

    I currently have an office together with a friend. We both have an LLC (each) with only one member but we share an office. Our advertising includes both LLC names and also the registration in the city shares both names.

    I ask…
    Is it okay for two LLCs to share the same office and the same registry in the city?

    or each LLC must be registered separately? I think for local tax purposes it could affect us.

    Thank you!

    reply
    • Matt Horwitz August 12, 2018

      Hi Ana, both LLCs can use the same address. I’m not sure what you mean by “share the same registry”. Hope that helps.

      reply

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