A Multi-Member LLC (MMLLC) is a Limited Liability Company with two or more owners, known as members. Like all LLCs, it offers limited liability protection, shielding the personal assets of members from business debts and lawsuits.
By default, the IRS treats an MMLLC as a partnership for tax purposes, meaning:
- The LLC does not pay federal income tax directly
- Profits and losses “pass through” to members
- The business files Form 1065 annually
- Each member receives a Schedule K-1 to report their share of income
Members can include individuals, corporations, or even other LLCs—including foreign entities. Ownership shares, voting rights, and profit distribution rules are defined in the Operating Agreement.
Why is it important?
MMLLCs are ideal for businesses with multiple co-founders or investors who want liability protection and flexible tax treatment without the rigid formalities of a corporation. They are commonly used in joint ventures, consulting firms, and foreign co-owned U.S. businesses.
Who is it for?
- Two or more individuals or entities wanting to form a U.S. LLC
- Foreign entrepreneurs co-owning a U.S. business
- Founders seeking shared ownership with pass-through tax benefits
