Starting a single member LLC married couple has certain benefits related to taxes that you wouldn't be able to take advantage of if you were going into business with somebody to whom you're not married.

Introduction to Forming an LLC as a Married Couple

If you are a married couple that conducts business together, forming a limited liability company together is a good way to organize your business. When you're starting a new business, it can be important to make sure you have things set up correctly. You're also going to want to make sure you understand how your chosen business structure will affect the way your company is taxed.

For the most part, you're going to set up your company just like any other two partners would. However, because you are a married couple, you're going to have different options available to consider in terms of taxation than you would if you were going into business with somebody else.

Getting Started

To begin, you're going to want to complete two important steps:

  • Choose a name for your company.
  • Designate a registered agent.

One of the first things you're going to need to do is select a name for your LLC. This can sometimes be more challenging than it may seem. You may have a great idea in mind for the name of your company but, if your name or something similar to it is already in use by another company in your state, you'll have to decide on something else. In most states, you'll be able to access a database through the official website of your local Secretary of State to help you determine if the name you have chosen is available.

Once you have your company's name out of the way, you'll need to choose a registered agent for your company. The registered agent can be:

  • You
  • Your spouse
  • Another person
  • Another company

Whoever you select, your registered agent is the person or entity that has agreed to receive legal correspondence on your company's behalf. While many states allow you to designate yourself as the registered agent, in some cases it might be best to choose an outside party.

Getting Organized

Now that you have a name and a registered agent for your company, it's time to start filing the appropriate documentation with the state. Keep in mind, there are likely filing fees involved as well but, in most states, these fees aren't high. One document that is a requirement in practically every state is known as the Articles of Organization, sometimes referred to as Articles of Incorporation. This document serves as a business charter.

Next, you'll need to file any additional formation documents that are required by your state. State-specific documents can usually be found on your Secretary of State's website. In most cases, these documents need to include the following information:

  • Your company's name
  • Your company's address
  • The registered agent
  • How long the company has existed
  • The name and address of at least one of the owners

Once your documents have been accepted by the state, you are officially in business together.

Starting Up

Now that your limited liability company is officially recognized by the state, it's time to draft an internal document known as an Operating Agreement. Your company's Operating Agreement is a contract between the two of you and should outline things such as:

  • How the company will be managed
  • What will happen if the company closes
  • How to proceed if one of you chooses to withdraw or buy out the other in the company
  • How much of the company each of you owns

However, community property states will ignore ownership percentages in the event of a divorce. In these states, the company will be divided 50/50 between the two of you, regardless of the amount of ownership you are each granted in the Operating Agreement.

You are not required to split ownership between the two of you. It is completely up to you to determine how this will be handled. For example, if you chose to, you could name just one of you as the owner and the other could be designated as an employee of the company. If one of you is designated as an employee, FICA and income taxes must be withheld for that person. Either way, you'll need to get an Employer Identification Number from the IRS.

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