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Single-member or multi-member LLC: which one for a foreign owner?

What changes when a US LLC has two or more owners: Form 1065 and K-1s instead of Form 5472, withholding on foreign members, the operating agreement and the cost.

6 min read · updated October 29, 2026

The difference in one sentence

One owner: the LLC is ignored for US income tax and files Form 5472 with a pro forma 1120. Two or more owners: the LLC is a partnership and files a partnership return, Form 1065, with a Schedule K-1 for every member.

Formation itself is the same. The state does not charge more for a second member, and the EIN application only asks how many members there are.

Single-member: simplest to run

  • One yearly IRS filing: Form 5472 with the pro forma 1120, due April 15.
  • Every transfer between you and the company is recorded and reported.
  • Decisions are yours alone; the operating agreement is short.

Multi-member: a partnership

  • Form 1065 every year, due March 15 for a calendar year, with a Schedule K-1 showing each member's share of income and costs.
  • The penalty for a late Form 1065 is charged per member, per month.
  • If the LLC has income that is taxable in the US, it must withhold tax on the share of each foreign member and pay it to the IRS during the year, even if nothing is distributed.
  • Each member reports their share at home, and in the US if there is US-taxable income.

The operating agreement matters more

With one owner the operating agreement mainly proves who owns the company. With two or more it is the deal between you. It should cover at least:

  • Who owns what percentage, and who put in what.
  • How profits are shared and when they are paid out.
  • Who may sign and spend, and which decisions need everyone.
  • What happens when a member wants out, dies, or the members disagree.

Couples and family

Two spouses who both own part of the LLC are two members, so the LLC is a partnership. If you want to keep the single-member filing, one person owns the LLC and the other can still work for the business under a separate agreement.

Adding or removing a member later

Bringing in a second member turns a single-member LLC into a partnership from that date; the tax filings for that year are split at the moment the member joins. The operating agreement is amended, and banks and payment providers must be told about the new owner. Going back from two members to one works the same way in reverse.

Frequently asked

Does a multi-member LLC still file Form 5472?

Normally not. It files Form 1065 with K-1s, and has its own rules for foreign members.

Is a multi-member LLC more expensive to form?

No. The formation cost is the same. The yearly bookkeeping and filings take more work.

Can CORA handle a multi-member LLC?

Yes. CORA prepares Form 1065 with a K-1 for each member and splits the year when a member joins or leaves.

This guide is general information, not legal or tax advice. Rules and fees change; check your own situation with a professional.