Previously, I discussed how to pay yourself when you are the owner of a single member LLC. In an effort to not “single out” the single member LLCs, I wanted to also discuss how to pay yourself in a multi member LLC. Luckily, how to pay yourself in a multi member LLC is pretty similar to paying yourself in a single member LLC.
There are three things to take into consideration when deciding how to pay yourself in a multi member LLC:
- Making sure you keep the LLC adequately capitalized
- Following the terms of the Operating Agreement.
- Whether the LLC is taxed as a partnership or as an S Corporation.
To add to point one in paying yourself. First, you need to first make sure the LLC will still be adequately capitalized after the members take any distributions. This means ensuring that, after the members are paid, the LLC will still have enough money available to pay for its overhead, stay current with debts, purchase any supplies or equipment that the LLC needs or may need. Keeping your LLC adequately capitalized is something that will help protect you from a court one day deciding to pierce the corporate veil if the LLC is ever involved in a legal dispute.
Taking those things into account, the actual method of how to pay yourself in a multi member LLC can vary. To conclude, this episode of All Up In Yo’ Business is all about paying yourself in your LLC. Check out the full video to learn more!
It is a
good great idea to consult with an attorney to figure out how to pay yourself in your LLC. Contact us today if you need help. Also, be sure to subscribe to our YouTube channel for more All Up In Yo’ Business!
Want to learn more about starting a business? Check out: How Do I Form an S Corp?