What Are the Different Types of LLCs?

When you decide to form an LLC, you quickly realize there is not just one version of it. There are different types, and the one you choose affects how your business is taxed, who can own it, and how it is managed day to day.

Not sure where to begin? Start by understanding what an LLC is first.

The good news: most people do not need anything complicated. If you are a solo business owner, a single-member LLC is likely the right fit. If you have partners, a multi-member LLC makes sense. Everything else is more specialized and built for specific industries, goals, or situations.

This guide breaks down all 9 types of LLCs, explaining what each one is, who it is for, and how it differs from the rest, so you can make the right call before you start your LLC.

Key Takeaways

What Are The Different Types of LLCs Based on Ownership?

What Is a Single-Member LLC?

A single-member LLC (SMLLC) has exactly one owner. It is the simplest LLC structure available and the most common choice for solo entrepreneurs, freelancers, consultants, and independent contractors.

The IRS classifies a single member LLC as a “disregarded entity” by default, meaning the business's income and expenses are reported directly on your personal tax return using Schedule C. There is no separate business tax return required unless you elect a different tax status.[1]

Advantages:

• Simple setup and minimal paperwork
• Pass-through taxation, no double taxation
• Personal asset protection from business liabilities
• Can add members later if the business grows

Disadvantages:

• Some states offer less creditor protection for single-member LLCs than for multi-member LLCs
• Without a clear operating agreement, courts may view the owner and the LLC as one entity

Available in: All 50 states

What Is a Multi-Member LLC?

A multi-member LLC has two or more owners (called members). Each member owns a percentage of the business and typically receives a proportionate share of the profits.

By default, the IRS taxes a multi-member LLC as a partnership, requiring the filing of Form 1065.[2]

Each member then receives a Schedule K-1 showing their share of income, deductions, and credits to report on their personal return.

Multi-member LLCs are popular for family businesses, co-founded startups, and any business where two or more people share ownership.

Advantages:

• Flexible profit-sharing arrangements
• Members can include individuals, corporations, or other LLCs
• Non-US citizens can be members
• Can elect S Corp or C Corp tax treatment

Disadvantages:

• More complex tax filing than a single-member LLC
• Requires an operating agreement signed by all members
• More paperwork during formation

Available in: All 50 states

What Are The Types of LLCs Based on Management Structure?

What Is a Member-Managed LLC?

In a member-managed LLC, the owners run the business themselves. All members share decision-making authority and can act on behalf of the company within the limits set by the operating agreement.

This is the default management structure in most states. It works well for small businesses where every owner is actively involved in daily operations.

Best for: Small teams, co-founders who both want a hands-on role, and family businesses

What Is a Manager-Managed LLC?

In a manager-managed LLC, members appoint one or more managers to handle day-to-day operations. Those managers may or may not be members of the LLC themselves.

This structure is useful when some members are passive investors who do not want to be involved in running the business. It also offers more privacy in some states: Rhode Island and Nevada, for example, only require manager names in public records when an LLC is manager-managed.

Best for: LLCs with silent investors, businesses with outside management, and real estate holding companies

What Is The Difference Between Member-Managed vs. Manager-Managed?

What Are The Different Types of LLCs Built for Specific Purposes?

What Is a Professional LLC (PLLC)?

A Professional LLC (PLLC) is a type of LLC specifically designed for licensed professionals. In many states, if you hold a professional license and want to form an LLC, you are required to form a PLLC rather than a standard LLC.

Professions that commonly require a PLLC include:

• Doctors and dentists
• Lawyers and attorneys
• Accountants and CPAs
• Architects and engineers
• Therapists and psychologists

A PLLC functions like any other LLC for liability protection and tax purposes. The key difference is that it includes specific provisions related to professional licensing and malpractice. Members of a PLLC are generally protected from the malpractice claims of other members, but they remain personally liable for their own professional actions.

Note: California does not allow PLLCs. Professionals in California must form a Limited Liability Partnership (LLP) or a Professional Corporation instead.

Available in: 29 states and the District of Columbia

The SBA's business structure guide is a helpful starting point when determining which entity type your state and profession require.[3]

What Is a Series LLC?

A Series LLC is a parent LLC with one or more sub-LLCs (called "series" or "cells") operating under it. Each series has its own members, assets, liabilities, and operating rules. Importantly, a lawsuit or debt against one series generally cannot reach the assets of another series.

This structure is popular with real estate investors who own multiple properties. Instead of forming a separate LLC for each property, which involves multiple filings, fees, and bank accounts, an investor can create one master LLC with separate series for each property.

Example: An investor with five rental properties creates a Series LLC. Each property sits inside its own series. If a tenant sues over one property, that series is affected; the other four properties are not.

Advantages:

• One state filing fee for the master LLC
• Each series protects its own assets independently
• Lower administrative costs than multiple separate LLCs
• Flexible, each series can have different members

Disadvantages:

• Not available in every state
• Each series still needs its own bank account and accounting
• Legal questions around bankruptcy and cross-state recognition are still developing

States that allow Series LLC formation: Alabama, Arkansas, Delaware, District of Columbia, Illinois, Indiana, Iowa, Kansas, Missouri, Montana, Nevada, North Dakota, Oklahoma, Puerto Rico, Tennessee, Texas, Utah, Virginia, and Wyoming

What Is a Low-Profit LLC (L3C)?

An L3C (Low-Profit Limited Liability Company) is a hybrid business structure designed for entrepreneurs who want to earn a small profit while primarily serving a charitable or social purpose. Think of it as a bridge between a traditional for-profit business and a nonprofit.

An L3C must meet three IRS requirements:

• Its primary purpose must be charitable or educational (not profit generation)
• It cannot support political or government-related purposes
• It must contribute toward a charitable cause without expecting a financial return

L3Cs are designed to attract program-related investments (PRIs) from private foundations, which are a type of investment that prioritizes social impact alongside modest financial returns.

Advantages:

• Can attract philanthropic investment while earning a profit
• Signals the social mission to donors and partners
• Retains the tax and management flexibility of a standard LLC

If your mission is more fully charitable with no profit intent, you may want to explore nonprofit formation services and 501(c)(3) status instead.

Disadvantages:

• Donations to an L3C are not always tax-deductible for donors
• Legal uncertainty makes some investors and foundations hesitant
• Limited to specific states

States that allow L3C formation: Illinois, Kansas, Louisiana, Maine, Michigan, Missouri, North Dakota, Rhode Island, Utah, Vermont, and Wyoming

What Is an Anonymous LLC?

An anonymous LLC lets you form a business without your name appearing in public records. The ownership information is kept off state databases, which protects your privacy.

This is not about hiding from the government. The IRS and banks still know who you are. Anonymous LLCs simply keep your name out of publicly searchable state records, protecting you from unwanted solicitations, public scrutiny, or exposure if you prefer to keep your business interests private.

States that allow anonymous LLCs:

• Delaware
• New Mexico
• Wyoming

Each of these states has different levels of privacy protection and different disclosure rules. Wyoming is widely considered the strongest for privacy because it does not require member names in its Articles of Organization and has minimal reporting requirements.

If you are also considering operating under a brand name different from your LLC name, read our guide on how to determine if you need a DBA alongside your anonymous LLC.

Advantages:

• Keeps your name out of public business registries
• Useful for public figures, real estate investors, and privacy-conscious owners
• Still receives all standard LLC benefits

Disadvantages:

• Does not protect you from the IRS or legal subpoenas
• May require a nominee organizer or registered agent to maintain anonymity
• Not available in all states

What Is a Restricted LLC?

A Restricted LLC is a specialized structure only available in Nevada. It is not designed for running a traditional business. Instead, it functions as a vehicle for transferring assets, typically real estate or other property, between family members over time.

A Restricted LLC cannot distribute assets to its members for a period of at least 10 years after formation (unless the Articles of Organization include a provision allowing earlier distributions). This restriction is what allows the LLC to be valued at a lower amount for tax purposes, reducing gift and estate tax obligations.

Best for: Estate planning and intergenerational asset transfers in Nevada

Available in: Nevada only

What Are The Different Types of LLCs Based on Operating Location?

What Is a Domestic LLC?

A Domestic LLC is an LLC that is formed and operates in the same state. This is the most common setup. If you form your LLC in Texas and run your business in Texas, you have a Domestic LLC in Texas.

What Is a Foreign LLC?

A Foreign LLC is an LLC that was formed in one state but wants to do business in another state. To legally operate in the new state, you must register your LLC there as a "foreign entity" by filing for a Certificate of Authority.

Common Reasons to Register as a Foreign LLC:

• You open a physical office or hire employees in a new state
• You have a significant number of customers in another state
• You own property in another state

Important: You still pay taxes and file reports in both your home state and the states where you are foreign-qualified. You will also need a registered agent service in each state where you are registered.

The IRS notes that registration requirements and tax obligations vary by state, so check with the relevant state's Secretary of State office before operating across state lines.[4]

How Are LLCs Taxed?

One of the most powerful features of an LLC is tax flexibility. The IRS allows LLCs to choose how they are taxed, regardless of which type of LLC you form.[5]

Should You Elect S Corp Status?

An S Corporation tax election can reduce self-employment taxes for LLC owners who are actively working in their business and generating consistent profit. To elect S Corp status, you file IRS Form 2553 with the IRS.

There are eligibility requirements:

• Your LLC must be a domestic entity
• Have 100 or fewer members
• Each member must be a US citizen or resident

Should You Elect C Corp Status?

A C Corporation tax election is generally not recommended for small businesses due to double taxation, but it can be useful for businesses seeking venture capital investment or planning to go public.

Which Type of LLC Is Right for You?

Here is a simple decision guide:

Not sure which structure fits your goals? Use our compare business types tool to see how an LLC stacks up against a corporation, sole proprietorship, and other structures side by side.

The Bottom Line

The right type of LLC depends on who owns your business, how it is managed, what industry you are in, and what your long-term goals are. For most people, the choice comes down to single-member or multi-member, and from there, a tax election like S Corp status if the numbers support it.

If you need something more specialized, such as a PLLC for your medical practice, a Series LLC for your real estate portfolio, or an anonymous LLC for privacy, these options are available and well-suited to the right situations.

The key is understanding your options before you file, not after. Ready to move forward?

Start your LLC with Swyft Filings and get the right structure in place from day one.

Bibliography

1. Internal Revenue Service. Single Member Limited Liability Companies. Accessed on May 05, 2026.
2. Internal Revenue Service. LLC Filing as a Corporation or Partnership. Accessed on May 05, 2026.
3. U.S. Small Business Administration. Choose a Business Structure. Accessed on May 05, 2026.
4. Internal Revenue Service. Limited Liability Company (LLC). Accessed on May 05, 2026.
5. Internal Revenue Service. LLC Filing as a Corporation or Partnership. Accessed on May 05, 2026.