default tax status
- One Member Sole Proprietorship
- Two or More Members Partnership
optional tax status
- “C” Corporation
- “S” Corporation subject to restrictions
Flexible & complicated. Under the default rules, an LLC with one member does not exist for federal tax purposes, and an LLC with more than one member is a partnership. If it files an IRS form, an LLC can become a corporation (S or C) for tax purposes. Some states follow the federal rules, and many do not.