Internal Operating Procedures Bylaws Operating Agreement 1. As with a corporation, all of the owners of an LLC enjoy limited personal liability. This means that being a member of an LLC doesn't normally expose you personally to legal liability for business debts and court judgments against the business. Generally, if you become an LLC member, you risk only your share of capital paid into the business. Nearly all states allow an LLC to be formed by just one person.
All states do allow one-person corporations.
Tennessee Many of these states are expected to join the majority of states that do permit single-member LLCs. Similarly, if you have an LLC with two or more members, it will be treated as a partnership for tax purposes, with each partner reporting and paying income tax on her share of LLC profits unless you elect to have the LLC taxed as a corporation. Again, you normally won't elect to do this, preferring to have your multi-member LLC follow the partnership tax route. Each member will then report his or her share of profits or losses on her personal Form 1040. LLCs that are taxed like corporations are able to split monies between business owners and the business itself, resulting in some situations in a significant overall tax saving.