Single-member LLC (SMLLC)
Definition
A Single-Member LLC (SMLLC) is a Limited Liability Company that is owned by exactly one person or one entity. The single owner is legally referred to as the "member." An SMLLC provides the exact same legal liability protection as a multi-member LLC or a corporation.
Why it matters
The distinction of being a "single-member" LLC is critically important for taxes. By default, the IRS treats a single-member LLC as a "disregarded entity." This means the IRS ignores the LLC for tax purposes and treats the business as a sole proprietorship. The LLC itself does not file a separate tax return; instead, the single member reports all business income and expenses on Schedule C of their personal Form 1040.
However, if the owner is a non-US resident, the SMLLC faces entirely different IRS reporting requirements (such as Form 5472) despite remaining a disregarded entity.
Example
John registers "John's Consulting, LLC" with the state of Texas. John owns 100% of the company. Because there are no other owners, it is a single-member LLC. At tax time, John does not file a corporate tax return. He simply adds a Schedule C to his personal tax return to report the income he made from consulting.