A limited liability corporation (LLC) that is owned and run by a married couple is known as a husband and wife LLC. Couples looking to launch a business together are increasingly using this form of corporate structure. However, many married couples are unsure about the tax repercussions of creating an LLC together. If a husband and wife LLC must submit a partnership return is one of the frequent queries.
Yes, a husband and wife LLC is required to submit a partnership return. This is due to the fact that for taxation purposes, the IRS views a husband and wife LLC as a partnership. Even if there are only two owners of the LLC, it is nevertheless regarded as a distinct legal entity from the spouses. The U.S. Return of Partnership Income, or Form 1065, is what the LLC is required to submit as a partnership. The LLC and its owners’ income, deductions, and credits are disclosed on this form.
The Secretary of State in your state must receive your articles of organization before you can create a husband and wife LLC. Basic information about the company, including its name and address, is provided in this document, which also establishes the LLC as a separate legal entity from its owners. A legal document called an operating agreement, which describes how the LLC will be governed and run, will also need to be written.
Depending on the type of company you are forming and the state in which you are forming it, there may be differences in the stages of company creation. Choosing a business name and checking to see if it is available are often the first two steps. After that, you must submit articles of incorporation to the Secretary of State of your state. In addition to providing the company’s name and address, this document also establishes the firm as a distinct legal entity from its owners. You must draft bylaws, a legal document that specifies how the business will be run, after the articles of incorporation have been submitted and accepted.
In conclusion, even though a husband and wife LLC has just two owners, it nevertheless needs to submit a partnership return. You must draft an operating agreement and submit articles of formation to the Secretary of State of your state in order to establish a husband and wife LLC. Depending on the type of company you are forming and the state in which you are founding it, the steps involved in forming a company may vary, but they typically include picking a business name, submitting articles of incorporation, and drafting bylaws.