Business Opportunities Weblog

Forming A Single-Member LLC

By on September 27, 2004 in Ideas

Nolo:

As of January 1, 2000, California joined the ranks of the many other states allowing people to form single-member LLCs. In fact, as of March 2003, every state in the nation allows single-member LLCs.

Becoming an LLC grants you protection from personal liability for business debts and judgments. But you will still be taxed as a sole proprietor, so attach a Schedule C to your 1040.

You mentioned your other option was forming a corporation. For many small service businesses that are just starting out, LLCs are a better choice than corporations. LLCs provide the same limited liability as a corporation, but without a separate corporate tax and the three-tiered organizational structure of a corporation. In a one-person corporation, the owner has to don various hats at different times — that of shareholder, director, president and secretary. It is difficult enough not to look too affected when wearing a single hat — much less three.

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Business Opportunities Weblog editor and publisher Dane Carlson lives in the Sierra Nevada mountains of California, just 15 miles from Yosemite National Park. He accidentally became a professional blogger in 2001. He has added 12,209 posts to the site.

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  • http://www.tedkarol.com Ted

    If one has an LLC, does one have to pay the double up on Social Security payments as if one is an employee of a corporation?

  • R Speelmon

    If one has a single member LLC, are bylaws necessary?

  • http://www.paralegal-plus.com Llc incorporator

    Re Llc bylaws: Some jurisdictions require written operating agreements to be on file in the company record books, other jurisdictions allow only an oral agreement. Limited liability companies have operating agreements versus bylaws.

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