By Steven D. Mercatante Esq.
 
One of the most common questions we receive revolves around the issue of LLC reporting. The following article will begin our exploration into the basic LLC structures with a detailed look at the Single-Member LLC while also offering some practical tips on how to handle your reporting requirements.
 
Before we get started, know that LLC stands for “Limited Liability Company;” NOT “Limited Liability Corporation.” Be patient with your payees, just because you know what an LLC is does not mean they even know what their own entity designation stands for. Do not argue with your payees, just ask for the proper documentation and if they insist they are an LLC “and that means they are a corporation” then you will just tell them what documentation you need to see; more on that documentation in a moment.
 
An LLC is problematic for reporting purposes because it can register as a number of different entity types, making it difficult to identify when reporting is required. Especially problematic is the rare situation when an LLC indicates it is a corporation, and exempt from reporting. We say this situation is rare because the overwhelming majority of organizations classified as LLCs are truly not corporations.
 
There is one more thing you need to know about LLC formation before we move on to our discussion of single-member LLC’s...