• Sole Proprietor: A business owned and operated by one person, where the owner is personally liable for all debts and obligations.
• LLC (Limited Liability Company): A business structure that provides liability protection for owners while allowing flexible management and tax benefits.
• Corporation: A legally separate entity from its owners, offering strong liability protection but requiring formal governance and regulatory compliance.

A Principal Business Activity is the primary revenue-generating operation of a company, describing the main goods or services it provides, such as real estate, restaurants, nail salons, etc. It is used for tax classification, regulatory filings, and business identification.

This determines the legal structure, tax classification, and operational management of the LLC.

A Single-Member LLC is typically treated as a disregarded entity for tax purposes, meaning profits and losses are reported on the owner’s personal tax return.

A Multi-Member LLC is generally taxed as a partnership by default, requiring additional filings, such as a partnership tax return (Form 1065) and K-1s for each member.

This determines how the multi-member LLC will be taxed and regulated by the IRS and state authorities.

Single-Member LLC: Typically treated as a disregarded entity, meaning profits and losses pass through to the owner's personal tax return.

Partnership: The default tax classification for multi-member LLCs, requiring the business to file Form 1065 and issue Schedule K-1s to each member.

Corporation: If elected, the LLC is taxed as either a C Corporation (Form 1120) or an S Corporation (Form 1120-S), which may offer tax advantages like lower self-employment taxes.

This determines tax implications, legal continuity, and potential liabilities when transitioning to an LLC.

If the company previously operated as a Sole Proprietorship, Partnership, or Corporation, it may have existing tax obligations, contracts, or liabilities that need to be addressed.

The business may need to transfer assets, EINs, licenses, and permits to the new LLC structure.

It ensures proper IRS classification and helps avoid issues with double taxation, prior debts, or compliance requirements.

The Name of Organizer is important because it identifies the person responsible for forming the LLC and filing its Articles of Organization with the state.

The Organizer does not have to be an owner or member but plays a key role in legally establishing the LLC.

Some states require the Organizer’s information for official records and compliance purposes.

Knowing the Organizer ensures clarity in who handled the formation process and can be useful for legal or administrative follow-ups.