can an LLC have members and separate economic units?

Yes, an LLC can have members and separate economic units.

Members: Members of an LLC are the owners of the business. They contribute capital to the LLC and share in its profits and losses. Members can be individuals, other LLCs, corporations, or trusts.

Separate Economic Units: An LLC can have separate economic units, known as "disregarded entities" or "single-member LLCs." These units are not recognized as separate entities for tax purposes, meaning that the LLC's income and losses are reported on the owner's personal tax return.

Benefits of Having Members and Separate Economic Units:

• Flexibility: LLCs can choose to have members or separate economic units, depending on their needs and tax situation.
• Pass-through taxation: LLCs with members are pass-through entities, meaning that their profits and losses are passed directly to the members. This can simplify tax compliance and reduce the tax burden.
• Limited liability: LLCs with separate economic units provide limited liability to their owners. This means that the owners are not personally liable for the debts and obligations of the LLC.

Example:

An LLC named "ABC LLC" has two members, John and Mary. ABC LLC also has a separate economic unit, known as "XYZ LLC." John and Mary are the owners of both ABC LLC and XYZ LLC.

• ABC LLC: John and Mary are the members of ABC LLC. They share in the profits and losses of ABC LLC.
• XYZ LLC: XYZ LLC is a disregarded entity or single-member LLC. It is not recognized as a separate entity for tax purposes. John and Mary are the sole owners of XYZ LLC, and its income and losses are reported on their personal tax returns.

Note: The rules governing LLCs and separate economic units vary by state. It is important to consult with an attorney or tax professional to ensure compliance with applicable laws.