[Anonymous]

This is a little off-topic but still relevant. If you are starting a multi-member LLC but each member lives in separate states, do you need to file the articles of organization in both states? And for taxes, do you each file the same schedule C when you are split 50/50 with the other member?

Thanks for your help!!!

[aaronmo]

I'm not 100% on 2…but

1. You would file in the state where your LLC is located.

2. There is no schedule c if it's a partnership…the LLC will issue k-1s and file a 1065. The schedule c is only for joint qualified (husband wife) and sole p.

AUD - 96
BEC - 84
FAR - 89
REG - 86

Aaron and always remember, YMMV

I profit from your CPE frustration. You're welcome.

[TommyTheCat]

LLCs are either taxed as corporations (very unlikely and likely not favorable, designated by making a check the box election, ie entity classification election), or as partnerships. As a function of federal tax law a partnership must have two or more “partners”, so a single member LLC is therefore designated as an entity disregarded for tax law, and thus files Schedule C connected directly to the 1040.

For a multi member LLC that defaulted to the partnership taxation regime, ie didn't make a check-the-box election, the entity will be taxed as a partnership and must file form 1065 and have the members report their distributive share of income/deduction on schedule e.

As far as the state side of things…the LLC files it's articles with the Secretary of State in the state under which laws it intends to exist or be formally recognized under. Typically the home state where the business is located or where the majority of business is transacted. Could also be in DE or another friendly state. The entity then “registers” as a foreign corporation for any other states in which it is required to do so…typically in states it has nexus or is “doing business” and/or states in which it has resident members.

AUD - 85
BEC - 89
FAR - 91
REG - 97

[Anonymous]

Thank you to both of you! This is very helpful!!

[Author]

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