Tax
Limited Liability Company (LLC)
A flexible legal entity that combines personal liability protection with passthrough taxation by default.
An LLC is a state-law entity that separates owner liability from business liability. Single-member LLCs are taxed as disregarded entities (Schedule C); multi-member LLCs as partnerships. Either can elect S-corp or C-corp tax treatment.
Most small businesses choose LLC for the legal protection and tax flexibility. The tax election is a separate decision from forming the LLC.
Common pitfalls
- Confusing the LLC legal form with its tax form; they're separate decisions
- Failing to register foreign LLCs in states where you actually do business
- California's $800 minimum franchise tax applies to every LLC operating in CA
Related service
See tax and CPA servicesHave a Limited Liability Company (LLC) situation in your business?
Federal, state, and local returns prepared and reviewed by a licensed CPA, with the planning done before year-end rather than after it.