A Single Owner LLC v.s. Two Owners LLC -- Which Is a Better?

[huntinheros]

I will open an LLC for Home Healthcare Agency to provide shift nursing service. I am debating to have just me as the sole owner or list my dad as my partners. My dad can help me with administration work from time to time. I also heard that for a two person LLC is better than just a single person LLC. A single person LLC has higher chance to be audited by IRS for example. Ideas?

 

[huntinheros]

Oh,, I know what reason I had in mind. Scorp does add complexity in tax filing and more cost. I will need to have payroll setup. But I don't have any profile the first couple years and I will not need to pay anyone. I think a partnership LLC makes the most sense to me in the first 1-3 years.

 

[jennieg]

@huntinheros The difference is that partnership are less likely to get audited vs a single member Llc but it’s taxed the same way

 

[huntinheros]

@jennieg Yes, understand! They will be taxed the same. But two owners would sound more solid -- that's the idea?! Thanks for your reply!

 

[kevfr]

@huntinheros A single member LLC is disregarded for tax purposes. Forming an LLC with another person automatically makes you a partnership and thus you must file a partnership tax return.

A possibly better option - elect to be taxed as an S Corp. S-Corps are also less likely to be audited and you can maintain 100% ownership. Owning 100% is always much easier in the long run

 

[huntinheros]

@kevfr I have researched on S-Corp. For the begging 2-3 years, I will not be able to make profile. Then I thought LLC makes more sense than s-corp. There was a reason, but I cannot remember the reason now. After I can make profit, I plan to convert to S-Corp. What do you think? Any benefits to have S-Corp since the beginning?