Can someone work under my LLC?
Asked by: Kayley Predovic | Last update: May 24, 2025Score: 4.8/5 (68 votes)
It's completely possible for a single-member LLC to have employees. In fact, many LLCs run their business with employees. Even if you don't want to hire full-time employees there are still lots of other options, such as independent contractors.
How do I employ someone under my LLC?
- Get an Employer Identification Number (EIN)
- Find out whether you need state or local tax IDs.
- Decide if you want an independent contractor or an employee.
- Ensure new employees return a completed W-4 form.
- Schedule pay periods to coordinate tax withholding for IRS.
Can someone else use your LLC?
No. LLC members are owners. As described above, some people may inherit or otherwise obtain a financial interest in the company, but that does not give them the same rights as members.
Can my husband work under my LLC?
If your spouse only does occasional work for your LLC, you can have them work on a freelance or contract basis. This can help your business save money on Social Security and Medicare taxes, but the full burden of those costs will fall on your spouse.
How many employees can you have under an LLC?
An LLC can have an unlimited number of employees. An employee is defined as any individual who is hired for wages or salary.
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What is the biggest disadvantage of an LLC?
A major disadvantage of an LLC is that owners may pay more taxes. When setting up as a pass-through to owners, they are subject to self-employment tax.
Can you collect unemployment if you start an LLC?
The answer depends on how much money you earn from the LLC and how long you've worked for the company. You can still receive your full benefit amount of unemployment insurance. However, once you begin gaining profit from your startup, you will receive less money from your unemployment benefits.
Can I pay my wife a salary from my LLC?
Hiring your spouse to work as an employee in your business can save you big on taxes. The savings can be particularly great if you are a sole proprietor or have a single-member LLC taxed as a sole proprietorship or as a partnership (as long as your spouse is not a partner).
How much can I pay my wife tax free?
The IRS allows you to gift up to $18,000 in money or property to an individual each year without having to report it to the IRS (for the tax year 2024). Even if your gifts exceed $18,000, it's still unlikely you'd have to pay taxes unless you've surpassed the lifetime gift tax exclusion ($13.61 million in 2024).
Can my wife work for my LLC for free?
Working alongside your spouse might seem like the ideal way to combine your work and home life. If your spouse is supportive of your business, he may even be willing to work for free. This practice is generally legal, but you may have to make your spouse an officer in your limited liability company.
Can someone sue me if I own an LLC?
Some situations where you can sue a business owner personally by piercing the corporate veil may include: Fraudulent or illegal activities. Courts may pierce the veil if the LLC is used to commit fraud or engage in illegal activities, exposing owners to personal liability for such actions.
Should I name my LLC after myself?
Generally, it's best practice to create a business that's distinct from you as a person, which might require a unique name. But for some small business owners, naming your business after yourself makes sense. If you do go that route, you should be very, very careful to treat your LLC as a distinct entity.
Can you be part owner of an LLC?
A limited liability company (LLC) is a business entity type that can have more than one owner. These owners are referred to as “members” and can include individuals, corporations, other LLCs, and foreign entities. Most states do not restrict LLC ownership, and there is generally no maximum number of members.
Can LLC have W-2 employees?
If your LLC successfully applies with the IRS to be taxed as a corporation, then a member acting as an employee of the LLC can receive a W-2. They'll also need to have the necessary taxes withheld from their paychecks.
How do I pay myself from my LLC?
To get paid, LLC members take a draw from their capital account. Payment is usually made by a business check. They can also receive non-salary payments or “guaranteed payments” — basically a payment that is made regardless of whether the LLC has generated any net income that month or quarter.
How to pay someone through an LLC?
If you have employees working for your LLC, then you will need to pay them through payroll. Just like paying yourself through payroll, you will need an EIN from the IRS, have access to a payroll system or third-party payroll service, and withhold the applicable taxes from your employees.
Can I give $100,000 to my son?
Some commonly asked questions when it comes to gift tax can be, "Can I gift my adult children money?" or "Can I gift $100,000 to my son?" The answer to both questions is yes. However, gifting money to children can have financial and tax implications for both the giver and the recipient.
Should I add my husband to my LLC?
If your spouse is being paid for his or her work with the business, helps out often and/or is otherwise heavily involved with your LLC, then it is pretty much essential that you add him or her to the company.
Can I give my daughter $50,000 tax free?
Bottom Line. California doesn't enforce a gift tax, but you may owe a federal one. However, you can give up to $19,000 in cash or property during the 2025 tax year and up to $18,000 in the 2024 tax year without triggering a gift tax return.
Can I pay my kids if I have an LLC?
If you decide to hire your child to work for you, you may be eligible for some benefits come tax time. If your business is a single-member LLC taxed as a sole proprietorship or an LLC taxed as a married couple, you may not be required to withhold or pay FICA or FUTA tax on your child's wages if they are under 18.
Is my wife entitled to my LLC?
California's Community Property Law and Your Business. California is a community property state, which means that most assets acquired during the marriage are considered jointly owned and are subject to equal division in a divorce.
Does an LLC owner have to take a salary?
LLC members don't need to pay themselves a salary, but doing so helps to separate personal and business profits, which can support your personal liability protection, among other personal benefits.
Can I start an LLC while employed?
Thankfully, an individual can form an LLC for their side business while working a W-2 job. Your employment status bears no weight on a state's decision to approve your LLC registration. Registering your side business as an LLC provides protection that you simply wouldn't be able to enjoy under any other circumstances.
Can I lay myself off and collect unemployment?
If you do in fact lay yourself off, you would then be eligible for unemployment. But you would be paying yourself that unemployment. However, in order to have unemployment eligibility, you'll have to work sufficient to get it. And you will really need changed circumstances to drive your loss of employment.
Are owners of an LLC considered employees?
Partners and owners in an LLC are generally referred to as members. “The partners are considered owners of the business and so they are not technically employees since they share in the gains and losses of the business (and invest capital)," says Falen O.