A sole member limited liability company (LLC) is an LLC owned by one person. This type of business is registered in the state it conducts business. As there is one owner, also known as a member, a married couple owning an LLC is still treated as a sole-member LLC by the IRS for tax purposes.
Financial Management
The owner of a single-member LLC takes money out of the business as needed and will put money into the business from their own funds as necessary.
Leadership and Management
The owner of a sole member LLC has full freedom to choose a name or title suggesting their leadership role – for example, President, CEO, Managing Partner. LLCs can elect single or multiple managers. The LLC’s operating agreement grants manager(s) authority to make day-to-day decisions.
Tax Considerations
For tax purposes, if the sole member LLC is owned by a corporation or partnership, it should be reflected on the owner’s tax return as a division.
Frequently Asked Questions
Can a single-member LLC have a managing member?
Can a single-member LLC have a president?