If you’re a solo entrepreneur, freelancer, or starting a side hustle, you may be wondering: Can an LLC be only one person? The answer is a clear yes — and it’s called a Single-Member LLC (SMLLC). This structure offers the benefits of a limited liability company while keeping operations simple for solo owners.
Here’s everything you need to know about single-member LLCs in the United States.
What Is a Single-Member LLC?
A Single-Member LLC is a limited liability company with only one owner, referred to as a “member.” It operates just like a multi-member LLC, but with one major difference — there’s only one person managing and making decisions for the business.
This structure is legal in all 50 states and recognized by the Internal Revenue Service (IRS) and state governments.
Benefits of a Single-Member LLC
- Limited Liability Protection: Your personal assets are protected from business debts and lawsuits.
- Simple Formation: Filing requirements are usually straightforward and inexpensive.
- Tax Flexibility: By default, the IRS treats a single-member LLC as a “disregarded entity,” meaning business income is reported on your personal tax return.
- Credibility: Operating as an LLC can make your business appear more professional and trustworthy.
How to Form a Single-Member LLC
Forming a single-member LLC is very similar to forming a regular LLC. Here’s how:
- Choose a Unique Name
Your LLC name must be distinguishable from others in your state and include “LLC” or “Limited Liability Company.” - File Articles of Organization
Submit this form to your state’s Secretary of State or relevant business agency. - Appoint a Registered Agent
This person or service will accept legal documents on behalf of your LLC. - Create an Operating Agreement
While not always legally required, this document outlines how your business will be run. It’s especially helpful for future legal clarity. - Get an EIN (Employer Identification Number)
Even as a one-person business, you may need an EIN to open a bank account or hire employees.
Apply here – IRS - Open a Business Bank Account
Keeping your personal and business finances separate is critical to maintaining limited liability protection.
How Is a Single-Member LLC Taxed?
By default, a single-member LLC is taxed as a sole proprietorship. This means:
- No separate business tax return is needed.
- Profits and losses are reported on Schedule C of your personal income tax return.
Alternatively, you can elect to have your LLC taxed as an S Corporation or C Corporation if it makes financial sense for your situation.
Learn more about LLC taxation – IRS
Common Questions About Single-Member LLCs
Q: Is a single-member LLC the same as a sole proprietorship?
No. While they may be taxed similarly, an LLC provides limited liability protection — a sole proprietorship does not.
Q: Can a single-member LLC hire employees?
Yes. You can hire employees, but you’ll need an EIN and must comply with federal and state employment laws.
Q: Do I need to renew my LLC every year?
Most states require annual reports and renewal fees. Check with your state’s business authority for specific rules.
Final Thoughts
Yes, an LLC can absolutely be owned by one person — and it’s one of the smartest moves a solo entrepreneur can make. A single-member LLC gives you legal protection, tax simplicity, and business credibility without the burden of complex corporate formalities.
If you’re ready to turn your idea into a real business, forming a single-member LLC might be your best first step.