Also known as a SMLLC, a single member LLC is a type of limited liability corporation that is structured with a single member rather than a group of members. This type of business organization may be granted to an individual or to a corporation that is identified as that single member. Like other business structures, organizing as a single member LLC means compliance with specific criteria supplied by a governmental regulatory agency, and complying with any laws and regulations that relate to the ongoing operation of that particular business type.
It is important to note that the ability to organize as a single member LLC is not available in all jurisdictions. Even within a given nation, provinces or states may or may not allow for this type of organization to take place. In many cases, the issue has to do with what type of qualifications a business must meet in order to be approved as any type of limited liability corporation. When those qualifications require that at least two members be involved in the business structure, this tends to rule out the ability to create a single member limited liability corporation.
In actual practice, a single member LLC may include an individual or a single company as that lone member. This is often important in terms of determining how the business will calculate and submit taxes to the appropriate tax agencies. When an individual chooses this particular structure for his or her business, there is normally an additional form that must be filed along with the individual tax form that most agencies will require. That form will help to account for any expenses as well as income that is incurred as part of the ongoing business operation. When the single member in this type of LLC is a partnership or a corporation, the range of forms that must accompany the basic corporate tax return are used to account for any income and expenses incurred during the tax period, making it possible to calculate the total tax due for that period.
One of the benefits of a single member LLC is that the range of protections provided by a limited liability corporation are extended to small business owners who choose this option of a sole proprietorship or other means of organizing the corporation. Depending on the range of protections currently provided with this approach, even an individual who operates a home business may find this approach to be the better option in terms of minimizing the personal liability that would be involved in the event the business was involved in some sort of litigation. For this reason, even small business owners who operate a single location would do well to investigate this particular option in greater detail.
