What Is an LLC Proprietorship?

A Limited Liability Company (LLC) is a business structure that is designed to reduce the risk for the business owners. A sole proprietorship is a business that is owned by a single individual. A business can be an LLC and a sole proprietorship simultaneously.

Limited Liability Company and the IRS

LLCs are not recognized by the IRS for tax purposes, so the business must choose whether to file as a sole proprietorship, partnership or corporation.

Sole Proprietorship and the IRS

A sole proprietorship is owned by a single person and the taxes are filed with a Schedule C on the owner's personal tax return.

An LLC Proprietorship

A business that is an LLC and chooses to file taxes as a sole proprietorship is a single member, limited liability company, also known as an LLC Proprietorship.

Disregarded Entity

An LLC with a single owner that does not choose to file taxes as a corporation is classified as a Disregarded Entity.

Selecting Your Tax Filing Status

To declare what tax filing status you are choosing for your LLC, use IRS Form 8832.

References

• IRS: Limited Liability Company (LLC)
• IRS: Sole Proprietorships
• IRS: Single Member Limited Liability Companies

Resources

• Business.gov: Business Incorporation
• IRS: IRS Form 8832
• Tax Guru: Choose Your Business Entity