Do members need to pay taxes on their share of the company?

Asked 4 months ago

I have decided to join a multi-member limited liability company. There is some confusion on my end on the taxation treatment of this kind of entity and LLC structure. Does this mean that all members will have a percentage of the company based on their investment? Does this mean that they will have to pay taxes on their share of the company?

Brittany McDonald

Brittany McDonald

Monday, September 26, 2022

Yes, as an LLC member, you will be required to pay taxes on your share of the business's profits. Unless you have an operating agreement that states otherwise, you will be responsible for taxes on profits proportionate to your share of investment in the company.

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