Limited Liability Company
From TaxAlmanac
Overview
A limited liability company (LLC) is an entity formed under state law by filing articles of organization as an LLC. Unlike a partnership, none of the members of an LLC are personally liable for its debts. An LLC may be classified for Federal income tax purposes as if it were a sole-proprietorship (referred to as an entity to be disregarded as separate from its owner), a partnership, or a corporation. If the LLC has only one owner, it will automatically be treated as if it were a sole-proprietorship (referred to as an entity to be disregarded as separate from its owner), unless an election is made to be treated as a corporation. If the LLC has two or more owners, it will automatically be considered to be a partnership unless an election is made to be treated as a corporation. If the LLC does not elect its classification, a default classification of partnership (multi-member LLC) or disregarded entity (taxed as if it were a sole proprietorship) will apply. The election referred to is made using Form 8832, Entity Classification Election. If a taxpayer does not file Form 8832, a default classification will apply.
Links
- SMLLC Businesses with Employees - Single Member Limited Liability Companies
- Publication 3402 Tax Issues for Limited Liability Companies
- Form 8832 Entity Classification Election
- Form SS-4 Application for Employer Identification Number
Additional information on LLCs
