Question

Can a sole proprietor form as a single-member limited liability company (LLC)? If so, how would such an LLC be taxed?

a. Yes, and it would be taxed as a corporation.
b. Yes, and it would be taxed as a sole proprietorship.
c. No, a sole proprietor cannot form an LLC.
d. Yes, and it would be taxed as a partnership.

Answer 1

Yes, a sole proprietor can form a single-member LLC, which would be taxed as a sole proprietorship.

Step-by-step explanation:

Yes, a sole proprietor can form a single-member limited liability company (LLC). This allows the owner to enjoy the benefits of limited liability protection while still maintaining the simplicity and flexibility of a sole proprietorship. The LLC would be taxed as a sole proprietorship, meaning that the profits and losses of the business would flow through to the owner's personal tax return. This is known as pass-through taxation.