Question

Should the members (owners) of an LLC also be allowed to serve as employees of the LLC and receive a salary? Why or why not?

Answer 1

Here is the Answer to the Question:

Those who own an LLC are considered to be owners or members as per the respective law and these are the persons who only invest money and as usually work for LLC but not as an employee but as a owner or as a member.Generally, the owners or members of LLC are paid out of profits earned by the LLC but not salary. LLC members are technically not LLC partners or employees. LLC member income are to be treated as personal income for LLC members for Taxation purpose and that income is not taxed in the hands of LLC.

So, the conclusion is a LLC owner or a member shall not be allowed to serve as employee as per the respective laws and are paid out of profits of the LLC but not the salary.

Hope your doubt is clarified.

Thank you.