LLCroadGuide
What is an LLC?
Verified on October 22, 2026 · By LLCroad
Short answer
An LLC (limited liability company) is a US business structure created under state law that keeps your personal assets separate from the company’s debts. By default the IRS treats it as a pass-through entity rather than a corporation (IRS overview). It is formed by filing articles of organization with a state, for example Wyoming for a state fee of $100.
A simple definition
An LLC is a company created by filing a short document, the articles of organization, with the Secretary of State of the state you choose. Its owners are called members. How they share decisions and profits is written in an operating agreement, a private contract between the members that banks usually ask to see.
Compared with a corporation, an LLC has fewer formalities: no board of directors, no shares to issue, no mandatory shareholder meetings. That flexibility is why it is the most common structure for small businesses, freelancers and online companies in the US.
What limited liability means
The LLC is a separate legal person. It signs contracts, owns its bank account and is responsible for its own debts. As a member, what you can lose is in principle limited to what you put into the company, not your personal savings or home.
That separation works best when you keep it visible: a dedicated business bank account, invoices and contracts issued in the name of the LLC, and no mixing of personal and company spending.
How the IRS treats an LLC
An LLC is a state-law structure, so the IRS applies its own default classification:
- Single-member LLC: treated as a “disregarded entity”, meaning its activity is reported through its owner.
- Multi-member LLC: treated as a partnership by default.
- On election: any LLC can choose to be taxed as a corporation instead.
When the single member lives outside the US, the LLC also files a yearly information return, Form 5472 with a pro forma 1120. Our Form 5472 guide explains it. What the owner then declares in their country of residence depends on local rules.
Single-member or multi-member
| Single-member LLC | Multi-member LLC | |
|---|---|---|
| Owners | One person or company | Several people or companies |
| Default IRS classification | Disregarded entity | Partnership |
| Operating agreement | Short, mainly for the bank | Essential: shares, votes, exit rules |
| Typical use | Solo founder, freelancer, online shop | Co-founders, joint ventures |
What a US LLC is useful for
- Selling to US customers with a US company name, address and invoices they recognise.
- Accepting card payments through a US Stripe account once the LLC has an EIN and a US bank account, as explained in our Stripe guide.
- Opening seller accounts on US marketplaces and app stores that ask for a US entity.
- Holding a US business bank account in dollars, separate from your personal finances.
Paperwork stays light: US companies no longer file a beneficial ownership report with FinCEN since the final rule. In Wyoming, the yearly obligations are the annual report and, for a foreign owner, Form 5472.
Forming an LLC from abroad
You do not need to be a US citizen or resident to form an LLC. LLCroad forms Wyoming LLCs for non-residents for $489, all-inclusive: state fee, registered agent, EIN, founding documents, bank account help and the first Form 5472. See what is included on our pricing page, or read why founders pick this state in our Wyoming LLC guide.
Ready to create yours? Start your order online.