Single-Member vs Multi-Member LLC Statistics
Comprehensive data comparing single-member and multi-member LLCs in the United States. 70% of all LLCs have only one owner, while 23% have two members. This analysis explores ownership patterns, tax implications, and state-specific protections.
Quick Answer: Single vs Multi-Member LLC Distribution
70% of LLCs are single-member, making them the dominant LLC structure. About 23% have two members, while only 7% have three or more members.
Single-member LLCs have grown from 126,000 returns in 2001 to over 2.5 million in 2019 (a 1,884% increase), now representing 8.8% of all Schedule C filers according to IRS data.
LLC Ownership Distribution Statistics
Single-Member LLCs
70%
Percentage of all LLCs with only one owner
Source: Industry Analysis
Two-Member LLCs
23%
LLCs with exactly two owners, often partnerships or couples
Source: Business Statistics
LLCs of Partnerships
72.7%
LLCs as percentage of all partnership returns (IRS 2022)
Source: IRS SOI
of Schedule C Filers
8.8%
Single-member LLCs as portion of Schedule C filers (up from 2.3% in 2001)
↑ since 2001
Source: IRS Data
Historical Growth of Single-Member LLCs
| Year | Single-Member LLC Returns | Growth from 2001 | Trend |
|---|---|---|---|
| 2001 | 126,000 | Baseline | → |
| 2010 | 1,200,000 | +852% | 📈 |
| 2015 | 1,900,000 | +1408% | 📈 |
| 2019 | 2,500,000 | +1884% | 📈 |
| 2023 | 3,200,000 | +2440% | 📈 |
Key Growth Insights
- • 1,884% growth in single-member LLC returns from 2001 to 2019
- • Single-member LLCs now account for 8.8% of all Schedule C filers, up from just 2.3% in 2001
- • LLCs have dominated partnership returns for 20+ consecutive years (IRS data)
Tax Treatment Comparison
| Tax Aspect | Single-Member LLC | Multi-Member LLC |
|---|---|---|
| Default Tax Classification | Disregarded Entity | Partnership |
| Tax Forms Required | Schedule C (Form 1040) | Form 1065 + Schedule K-1s |
| Separate Tax Return | No - Reports on personal return | Yes - Files informational return |
| Self-Employment Tax | 15.3% on net income | 15.3% on distributive share |
| QBI Deduction | Up to 20% eligible | Up to 20% eligible |
| S-Corp Election | Available | Available (max 100 members) |
| EIN Requirement | Only with employees | Always required |
💡 Tax Tip: Pass-Through Taxation
Both single-member and multi-member LLCs benefit from pass-through taxation, avoiding the double taxation faced by C corporations. According to the IRS guidelines , this affects over 95% of single-member LLCs.
Industry Distribution of LLCs
Top Industries for LLCs
- Real Estate 50.7%
- Professional Services High adoption
- Finance & Insurance 49.6% of profits
- Healthcare Growing
- Technology Popular
Member Preferences by Industry
- • Real Estate: Often single-member for individual properties
- • Professional Services: Mix of single and multi-member
- • Family Businesses: Typically multi-member
- • Consulting: Predominantly single-member
According to IRS partnership statistics, real estate and rental/leasing account for 50.7% of all partnerships and about 33.9% of all partners. The finance and insurance sector, while a smaller percentage of total partnerships, reports 54.2% of total partnership income.
State-Level Protection for Single-Member LLCs
Strong Protection
Equal protection for single and multi-member LLCs
- • Delaware
- • Wyoming
- • Nevada
- • Alaska
- • South Dakota
Moderate Protection
Some protection with limitations
- • Arizona
- • Virginia
- • Oklahoma
- • Texas
Limited Protection
Weaker protection for single-member LLCs
- • Florida
- • California
- • Colorado
- • Georgia
- • Utah
⚠️ Important Note on Out-of-State LLCs
According to legal precedent, forming a single-member LLC in a strong-protection state (like Delaware or Wyoming) may not protect residents of weak-protection states (like Florida). Courts typically apply the law of the state where the LLC owner resides. Learn more about state protections .
Advantages & Disadvantages Comparison
👤 Single-Member LLC
Advantages
- ✓ Simplified tax filing - no separate business return
- ✓ Complete control over business decisions
- ✓ No EIN required unless you have employees
- ✓ Easier formation and maintenance
- ✓ No partner disputes or voting issues
Disadvantages
- ✗ Weaker asset protection in some states
- ✗ Self-employment tax on all profits
- ✗ Limited capital raising options
- ✗ Business continuity concerns if owner becomes incapacitated
👥 Multi-Member LLC
Advantages
- ✓ Stronger asset protection in all states
- ✓ Shared resources and expertise
- ✓ More tax planning flexibility
- ✓ Better business continuity
- ✓ Easier to raise capital from partners
Disadvantages
- ✗ Complex tax filing (Form 1065 + K-1s)
- ✗ Potential for member disputes
- ✗ EIN always required
- ✗ Need comprehensive operating agreement
LLC Size and Revenue Statistics
Revenue Distribution
- Under $50,000 40%
- $50,000 - $250,000 35%
- $250,000 - $1M 18%
- Over $1M 7%
Member Distribution
Key Insights
The data shows that 40% of LLCs have less than $50,000 in annual revenue, indicating many are small businesses or startups. The fact that 70% have only one owner suggests LLCs are the preferred structure for solo entrepreneurs seeking liability protection.
Only 13% of LLCs have three or more members, and while rare, some LLCs can have dozens or even hundreds of members, especially for joint ventures or real estate holdings.
Frequently Asked Questions
What percentage of LLCs are single-member?
Approximately 70% of all LLCs are single-member, making them the dominant LLC structure. About 23% have two members, while only 7% have three or more members.
How are single-member LLCs taxed differently from multi-member LLCs?
Single-member LLCs are treated as "disregarded entities" and report income on Schedule C of their personal tax return. Multi-member LLCs are taxed as partnerships by default, filing Form 1065 and issuing K-1s to members. Both enjoy pass-through taxation, avoiding double taxation.
Which states offer the best protection for single-member LLCs?
Delaware, Wyoming, Nevada, Alaska, and South Dakota offer the strongest protection for single-member LLCs, treating them equally to multi-member LLCs. Florida, California, and several other states provide weaker protection, allowing creditors remedies beyond charging orders.
Can a single-member LLC add members later?
Yes, a single-member LLC can add members at any time, converting it to a multi-member LLC. This will change the tax classification from disregarded entity to partnership, requiring the LLC to obtain an EIN and file Form 1065 going forward.
What is the average number of members in a multi-member LLC?
While specific averages aren't published, data shows that 23% of LLCs have exactly two members, and only 7% have three or more. Most multi-member LLCs have 2-5 members, typically being partnerships, married couples, or small groups of investors. Large LLCs with dozens or hundreds of members are rare but legal.
Data Sources & Methodology
Primary Data Sources
- • IRS Statistics of Income - Partnership Statistics - Tax year 2022 data showing 72.7% of partnerships are LLCs
- • IRS Single Member LLC Guidelines - Official tax treatment and filing requirements
- • U.S. Census Bureau Business Formation Statistics - Business application and formation trends
- • Wolters Kluwer State Protection Analysis - State-by-state LLC protection laws
- • Industry surveys and business formation service data (2023-2024)
Methodology Notes
- • The 70% single-member LLC statistic is widely cited across industry sources
- • IRS partnership data is the most recent available (Tax Year 2022)
- • State protection classifications based on current statutes and case law
- • Growth percentages calculated from IRS Statistics of Income historical data
- • Some statistics are estimates based on sampling and may have margins of error
Last Updated: November 2025 | Next Update: When 2023 IRS SOI data becomes available