Definition:
A Single-Member LLC (SMLLC) is a Limited Liability Company with only one legal owner, known as the “member.” It offers the same liability protection as a multi-member LLC but with a simpler ownership and management structure.
By default, an SMLLC is treated as a disregarded entity for U.S. tax purposes. This means:
- The business itself does not pay federal income tax
- All profits and losses are reported on the owner’s personal tax return
Why is it important?
An SMLLC allows solo entrepreneurs including foreign founders to operate a U.S. based business with liability protection, pass-through taxation, and minimal complexity. However, foreign-owned SMLLCs have specific IRS filing obligations, including Form 5472, even if no income is earned.
Who is it for?
Solo entrepreneurs, freelancers, consultants, or non-resident individuals who want to form a U.S. LLC and retain 100% ownership, with full control and simplified compliance.
