The company itself · A term for founders abroad
What is a multi-member LLC?
An LLC with two or more owners; a partnership for US tax, filing Form 1065 with a Schedule K-1 for each member.
Checked against the IRS's instructions and the states' own rules. Reviewed by Saais Patel, compliance reviewer.
Term 67 of 105 in the glossary, filed under M.IRS: limited liability company
Multi-member LLC, for a founder abroad.
With two or more owners, an LLC is a partnership for federal tax unless it elects to be taxed as a corporation. It files Form 1065 by 15 March and gives each member a Schedule K-1. A partnership doesn't file Form 5472, which is for corporations and foreign-owned single-member LLCs.
If it has income connected with a US trade or business, it withholds tax on each foreign partner's share, generally 37% for individuals and 21% for companies. The operating agreement matters far more with two owners than with one: it decides who controls the company and what happens when someone leaves.
Sources: IRS: limited liability company.
Read next · guide · 3 minForm W-8BEN, W-8BEN-E and W-9: which one your company gives, and how to fill itWhat founders ask next.
- Does a multi-member LLC file Form 5472?
- No. It files Form 1065 with a K-1 for each member, and Forms 8804 and 8805 if it withholds on foreign partners.
- If my spouse and I own an LLC, is it multi-member?
- Usually: two owners make a partnership, whatever their relationship. A narrow IRS rule lets spouses who hold the LLC as community property treat it as single-member, so ask an adviser if your country's marital property rules might apply.
- Can a multi-member LLC be taxed as a corporation?
- Yes, by electing on Form 8832, though for founders abroad that usually means 21% US tax that a partnership wouldn't pay.
03 · See also
- The EIN and IRS formsForm 1065The US partnership return, filed yearly by a multi-member LLC, with a Schedule K-1 for each owner showing their share.Read the term
- The EIN and IRS formsSchedule K-1The statement a partnership gives each owner showing their share of its income, deductions and credits, filed with Form 1065.Read the term
- The company itselfOperating AgreementThe private contract among an LLC's members that sets ownership, management and what happens when someone leaves; it isn't filed with the state.Read the term
- The company itselfLLCA US company whose owners aren't personally liable for its debts, and whose profit is taxed once, to the owners, unless it elects otherwise.Read the term
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