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SESK: Stuff Everyone Should Know · sesk.info/biz-llc-created-by-state

What level of law authorizes a limited liability company (LLC)?

State law. The LLC is a business structure allowed by state statute.

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  1. State law ✔
  2. Federal law passed by Congress
  3. IRS regulations

Why: The IRS says an LLC is a business structure allowed by state statute. In most states, formation details come from state law, while the IRS determines federal tax classification.

Huh, didn't know that: Most states also allow single-member LLCs, with only one owner.

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References

Answer: State law. The IRS says an LLC is a business structure allowed by state statute. In most states, formation details come from state law, while the IRS determines federal tax classification.

  1. IRS: Limited liability company (LLC) www.irs.gov/businesses/small-businesses-self-employed/limited-liability-company-llc
    A Limited Liability Company (LLC) is a business structure allowed by state statute.
    Checked 2026-10-11.

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