Disregarded Entity Definition

Disregarded entity is an ownership option for single-member LLCs (limited liability corporations) with regard to business entity tax obligations.

Disregarded Entity Expanded Definition
A single-member LLC can file with the IRS as either a corporation or as a disregarded entity. In some states, married owners of a two-member LLC may also have the option of designating the business as a disregarded entity with the IRS.

When an LLC files taxes with the IRS as a disregarded entity, payments are made as part of the owner(s) personal tax report instead of as a separate corporation. See the IRS website for information about required IRS forms.

Related Articles
What Is a Disregarded Entity?
What Is an LLC, and How Do You Form One?
Single Member Limited Liability Companies

Last Updated By

Christan Neff | Apr 17, 2023

Check out Our Accounting Software

See a Demo

Back to Top