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Can you form an LLC without a partner?

On Behalf of | May 24, 2024 | Business Law |

Limited Liability Companies (LLCs) are generally lauded for their ability to combine the ease of use of a sole proprietorship or general partnership with the benefits of a corporation. 

But can you create an LLC if you’re just a one-person show, without a partner or even employees? Absolutely. 

Single-member LLCs are not uncommon

A single-member LLC is a limited liability company with only one owner, referred to as a member. It is a legal entity separate from its owner. Benefits include:

  • There is only limited financial liability for the owner since the owner’s assets and debts and the company’s assets and debts are two different things.
  • Pass-through taxation is the usual default operating method, which means that the profits and losses generally pass through to the owner’s personal tax return, avoiding the “double taxation” that comes with some other business entities.
  • There’s a high degree of operational flexibility since there are fewer formalities that have to be legally observed in corporations. 

Creating an LLC as a single “member” isn’t any more difficult than creating an LLC with several members. You start by selecting a unique name for your business that complies with state law, then creating and filing the appropriate formation documents with California’s business office. Then, designate yourself to be the registered agent for legal documents, craft your operating agreement, obtain an EIN and register for all of the permits and tax payments that you need to make. 

While the mechanics of creating a single-member LLC are fairly standard, they can be intimidating and confusing to navigate on your own. Seeking early legal guidance can help you decide if an LLC is right for you and make certain that you achieve your goals as easily as possible.