A limited liability company is always taxed as a partnership, regardless of the number of its members.

Question

Quizplus · Accepted Answer

A limited liability company (LLC) has the option to choose how it is taxed. By default, a single-member LLC is taxed as a sole proprietorship, while a multi-member LLC is taxed as a partnership. However, LLCs can also choose to be taxed as an S corporation or C corporation. Therefore, an LLC is not always taxed as a partnership, but has the flexibility to choose its taxation.

A Limited Liability Company Is Always Taxed as a Partnership