Types of LLC

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 2,748 reviews

Jump to Section

Need help with an Operating Agreement?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

What are the Different Types of LLC?

LLCs are a popular business entity, and there are various types of LLC you can choose from. For example, a limited liability company or an LLC is a business structure that effectively combines the pass-through taxation advantage while providing liability protection simultaneously.

LLCs are relatively easy to form by contacting LLC lawyers and creating a staunch LLC operating agreement. However, the type of LLC you choose will affect your business protection and federal tax clauses.

Here's a list of the different types of LLC to give you further insight on the subject:

Single-Member LLC

A single-member LLC comprises a single owner without any legal partners. As far as taxation is concerned, a single-member LLC is considered a 'disregarded' or sole business entity like a sole proprietorship.

Furthermore, because this LLC has no employees, its operating agreement is created with minimal clauses to identify its status as a separate entity. Most importantly, single-member LLC owners need to keep their personal and business assets separate for tax purposes.

Multi-Member LLC

Multi-member LLCs are simply LLCs with partners. Whether the LLC has two or more partners, each will have a share percentage in the company depending on their investment.

This percentage should be specified in the LLC's operating agreement to avoid future inconveniences. The IRS treats a multi-member LLC as a business partnership regarding taxation.

Manager-Managed LLC

A manager-managed LLC also comprises more than one member but has a different operating agreement than a multi-member LLC. The members select a manager among themselves or from a third party to oversee the basic operations of the business.

Apart from overseeing everyday operations, the manager will also have the right to make any decisions regarding the company without any input from the other members.

Member-Managed LLC

As the name suggests, a member-managed LLC is the opposite of a manager-managed LLC. In these types of LLC, the members have complete control over the crucial decisions and everyday operations conducted for their business.

However, the share percentage outlined for each member in the operating agreement will decide which member has the final say.

Family LLC

A family LLC consists entirely of family members. Any family member can be a part of this business entity, including blood relatives, adopted children, and spouses.

The state treats these LLCs as regular multi-member LLCs for taxation purposes. The articles of the organization define the controlling members of the LLC. However, the family members typically pick one or two members to manage the business.

Investment LLC

A group of people willing to invest in a particular business entity can form an LLC. An investment LLC combined some characteristics of a corporation and a partnership in terms of taxation and member benefits.

Real Estate LLC

A real estate LLC is a domestic limited liability company devised for investing in real estate.

However, the owner legally remains separate from the properties involved in the LLC. Therefore, in case of a transition to a different owner, rental property deeds won't need to be renewed. Contracts are solely between the property and the tenants without any legal involvement of the LLC owner.

Holding Company LLC

A holding company LLC, also known as an umbrella LLC, is a type of LLC that owns other small businesses. Usually, large business entities use LLC holding companies to divide their subsidiaries into separate legal entities.

Anonymous LLC

Anonymous LLCs are devised to protect the owner's privacy. Currently, only a few states let owners of domestic limited liability companies remain anonymous. These include Delaware, Nevada, Wyoming, and New Mexico.

Meet some lawyers on our platform

Gregory F.

2 projects on CC
View Profile

Donya G.

59 projects on CC
View Profile

Christopher M.

10 projects on CC
View Profile

Tabetha H.

12 projects on CC
View Profile

What Is an LLC?

An LLC or limited liability company is an innovative business structure introduced in the US. The structure is designed to protect owners from the responsibilities of business ownership. These include debts, liabilities, and taxes.

Created in 1977, LLCs are mainly hybrid business formats that provide unique characteristics from other business structures.

For example, its limited liability feature makes it similar to a corporation. At the same time, the pass-through taxation system is the main feature of a partnership. Today, there are many types of LLCs operating in the US for business owners to choose from.

Here is an article about choosing the proper business structure to see if LLCs are right for you.

How Many Types of LLCs Are There?

There are many types of LLCs operating under the limited liability legal system. Mainly, LLCs are divided based on their ownership and management.

Meaning an LLC can be either single-member or multi-member in terms of ownership. A sole business owner can create an LLC or make it by multiple owners having their share percentage.

On the other hand, an LLC can be member-managed or manager-managed. This depends on how the owner or owners choose to manage their LLC.

Based on these two main structures, the LLC can belong to other sub-types of LLC. These include family LLCs, holding company LLCs, and real estate LLCs.

Here is an article about the different kinds of LLCs you can work with.

Can an LLC Be an S Corp?

Usually, the terms LLC and S Corps are used alongside each other, while both carry entirely different meanings. For example, an LLC is a type of business entity. On the other hand, an S corp denotes a tax classification.

That's why, in some cases, a company can be both an LLC and an S corp. For example, a business owner can form an LLC but can be taxed as an S corp. In this case, your company will still be taxed under the basic LLC taxation system.

Here's an article about the differences between LLCs and S corps.

Which Types of LLC Are Best for Me?

Choosing the correct option from the multiple types of LLCs can be a tricky task.

You can start by analyzing the main goals of your business and considering the laws of your state. Besides that, you'll also have to consider the members involved.

For example, if you're going for a sole proprietorship, then a single-member LLC is the structure for you. However, if multiple members are involved in your business venture, you should go for multiple-member LLC.

Further, you'll have to discuss with your fellow members about the management technique of your company. In this case, you'll have to choose between member-managed and manager-managed LLCs.

The best way is to get some professional help. If you're wondering how much a lawyer charges for an LLC, here's an article about how to get an LLC to help you out.

How Do I Get an LLC?

Getting an LLC is a straightforward task. However, you'll have to follow some steps to form a proper organization.

  • Choose a Name. Your business’ name goes on to become the face of your company. That's why you should choose a suitable name for marketing purposes and helps you create a positive brand identity.
  • Get a DBA Name. If you want to run your company under a different name, you'll have to register a DBA. Meaning you're doing business under the assumed name.
  • Fill the Articles of Organizations. Next, you will need to file articles of organization according to your state laws. Again, this is a simple document that you can get from your state's business or filing office.
  • Create an Operating Agreement. After filing for an article of organization, you'll need to draft an operating agreement. Here, you'll have to take the different types of LLC into account. For example, if yours is a multiple-member LLC, your contract will specify the ownership percentage of each member.

And that's it. Once you have created your LLC, your state might require you to announce it through various publications or obtain other relevant licenses and permits.

Post a project in ContractsCounsel’s marketplace to get free flat fee bids from lawyers to review and compare. All lawyers in our network are vetted by our team and peer-reviewed by customers for you to explore before hiring.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Lawyers

Brandon L. on ContractsCounsel
View Brandon
Member Since:
October 1, 2020

Brandon L.

Managing Partner, Attorney
Free Consultation
Get Free Proposal
Dallas-Fort Worth
11 Yrs Experience
Licensed in TX
Juris Doctor – Pepperdine University School of Law – Malibu, California

Brandon is a Texas Super Lawyer®, meaning he is among the top 2.5% of attorneys in his state. He has designed his practice to provide a unique ecosystem of legal support services to business and entrepreneurs, derived from his background as a federal district law clerk, published biochemist, and industry lecturer. Brandon is fluent in Spanish, an Eagle Scout, and actively involved with the youth in his community. He loves advocating for his clients and thinks he may never choose to retire.

Maxwell L. on ContractsCounsel
View Maxwell
Member Since:
September 24, 2020

Maxwell L.

Lawyer, Owner
Free Consultation
Get Free Proposal
New Berlin, WI
11 Yrs Experience
Licensed in WI
Marquette University Law School (JD)

Firm rated best ADR firm for Wisconsin and won an award for cultural innovation in dispute resolution from acquisition international magazine in 2016 and it was rated "Best of Brookfield" by Best Businesses in 2015. Attorney Maxwell C. Livingston was rated 10 best in Labor & Employment Law by American Institute of Legal Counsel and 40 Under 40 by American Society of Legal Advocates for 2016; he also won 10 Best by American Institute of Family Law Attorneys. He is licensed in Wisconsin in all state and federal courts, and in the 7th Circuit Court of Appeals, wherein he won a landmark decision in McCray v. Wielke.

Richard E. on ContractsCounsel
View Richard
Member Since:
October 1, 2020

Richard E.

Senior Partner, Attorney
Free Consultation
Get Free Proposal
Dallas-Fort Worth
14 Yrs Experience
Licensed in TX
Juris Doctor – University of LaVerne College of Law

Richard is a wizard at taking on bureaucracies and simply getting the job done. His clients value his straight-forward counsel and his ability to leverage a top-notch legal staff for efficient and effective results. Richard is a professional engineer, professor of law, and has been named among the top 2.5% of attorneys in Texas by the Super Lawyers®. When he is not driving results for his clients, Richard can be found with his small herd on his Texas homestead.

Seth S. on ContractsCounsel
View Seth
Member Since:
September 30, 2020

Seth S.

Attorney
Free Consultation
Get Free Proposal
New York
8 Yrs Experience
Licensed in NY
Touro Law School

I am an attorney admitted in NY, with over 6 years of experience drafting, reviewing and negotiating a wide array of contracts and agreements. I have experience in Sports and Entertainment, Real Estate, Healthcare, Estate Planning and with Startup Companies. I am confident I can assist you with all of your legal needs.

Rishma E. on ContractsCounsel
View Rishma
Member Since:
October 1, 2020

Rishma E.

Attorney-at-Law
Free Consultation
Get Free Proposal
Miramar, FL
8 Yrs Experience
Licensed in FL
St. Thomas University School of Law

Rishma D. Eckert, Esq. is a business law attorney who primarily represents domestic and international companies and entrepreneurs. A native of both Belize and Guyana, she remains engaged with the Caribbean community in South Florida: as a Board Member and General Counsel for the Belize American Chamber of Commerce of Florida, and Member of the Guyanese American Chamber of Commerce. She holds a Bachelor of Laws degree (LL.B.) from the University of Guyana in South America, a Master’s degree in International and Comparative Law (LL.M.) from Stetson University College of Law in Gulfport, Florida, and earned a Juris Doctor degree (J.D.) from St. Thomas University School of Law in Miami, Florida. Licensed to practice in the State of Florida and the Federal Court in the Southern District of Florida, Mrs. Eckert focuses her passion and practice on domestic and international corporate structuring and incorporation, corporate governance, contract negotiation and drafting, and trademark and copyright registrations.

Mark A. on ContractsCounsel
View Mark
Member Since:
October 1, 2020

Mark A.

Attorney
Free Consultation
Get Free Proposal
Jacksonville, FL
18 Yrs Experience
Licensed in FL
University of Florida

Mark A. Addington focuses his practice primarily on employment litigation, including contractual disputes, restrictive covenants (such as non-competition, non-solicitation, or confidential information restrictions), defense of wage and hour, harassment, retaliatory discharge, disability, age, religion, race, and sex discrimination.

Kiel G. on ContractsCounsel
View Kiel
Member Since:
October 2, 2020

Kiel G.

Principal
Free Consultation
Get Free Proposal
Hollywood, FL
5 Yrs Experience
Licensed in FL
Florida State University

Founder and Managing partner of Emerald Law, PLLC, a business law firm specializing in contract drafting and corporate transactions. Kiel worked as in house counsel for a variety of companies before launching his own firm, and most recently served as the Chief Legal Officer for an international private equity firm.

Jane C. on ContractsCounsel
View Jane
Member Since:
October 8, 2020

Jane C.

Attorney
Free Consultation
Get Free Proposal
New York
17 Yrs Experience
Licensed in CT, DC, NY
Pace University School of Law

Skilled in the details of complex corporate transactions, I have 15 years experience working with entrepreneurs and businesses to plan and grow for the future. Clients trust me because of the practical guided advice I provide. No deal is too small or complex for me to handle.

Jarrett S. on ContractsCounsel
View Jarrett
Member Since:
October 14, 2020

Jarrett S.

Startup Attorney
Free Consultation
Get Free Proposal
Marietta, Georgia
14 Yrs Experience
Licensed in GA
Emory University School of Law

I work with early stage startups (in Georgia and internationally) with their formation, contract, patent and investment needs.

Benjamin M. on ContractsCounsel
View Benjamin
Member Since:
October 26, 2020

Benjamin M.

Attorney
Free Consultation
Get Free Proposal
Atlanta, GA
10 Yrs Experience
Licensed in GA
Georgia State University

Experienced Attorney focused on transactional law, payments processing, banking and finance law, and working with fintech companies with a demonstrated history of driving successful negotiations in technology sourcing and transactions and strong understanding of government contracts and the procurement process

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call