You’ve probably heard that forming an LLC is a smart move for protecting your business and assets. But did you know there are six main types of LLCs—and two bonus variations—that each serve very different purposes?
In this guide, we’ll break down exactly what those types are, who should use them, and how choosing the right LLC can mean the difference between real asset protection and costly mistakes.
Let’s unpack it.
1. Single-Member LLC for Rentals
Purpose: Asset Protection
Tax Form: Schedule E
This is by far the most common LLC. Over 10 million of the 21 million LLCs in the U.S. are single-member, and most of them are for owning rental real estate. Why? Because when something goes wrong at your rental (say, a tenant slips and falls), the LLC helps isolate liability—keeping your personal assets out of the crossfire.
Rule of thumb: Set up one of these as soon as you close on a property.
Bonus tip: You don’t need to worry about your mortgage due-on-sale clause—most banks allow the transfer to an LLC you fully own.
Equity Alert: If you’ve got more than $200K in equity across multiple properties, consider using separate LLCs to avoid putting all your eggs in one basket.
2. Single-Member LLC for Side Hustles
Purpose: Legitimacy & Protection
Tax Form: Schedule C
Got a small business, consulting gig, or side hustle? This is your starting point. While there’s no special tax savings here, you gain legitimacy (for vendors, clients, and banks), asset protection, and the ability to scale responsibly.
But here’s the catch:
Don’t mix your side hustle with rental properties in the same LLC. Keep them separate to avoid exposing your assets to risk from different types of activities.
There’s more details on single-member LLCs in this blog: Is the Single Member LLC a Solution for Me?
3. LLC Taxed as an S Corporation
Purpose: Major Tax Savings
Tax Form: 1120S
Here’s where it gets exciting.
Once your business nets over $50K/year, it’s time to convert your LLC to an S Corp. Why? Because you can potentially save thousands in self-employment taxes.
How it works:
You pay yourself a “reasonable salary” (which is subject to employment taxes), but profits beyond that come to you as distributions—not subject to self-employment tax. We’ve helped thousands of clients save $8K+ per year this way.
If you’re making over $50K in profit, call your mom to celebrate… then call us to convert to an S Corp.
4. Multi-Member LLC (Partnership LLC)
Purpose: Joint Ownership
Tax Form: 1065
This LLC type comes into play when you’re partnering up—whether it’s with your spouse, your trust, another person, or even your own S corporation.
Two common variations:
- Rental partnerships: For co-owning real estate without triggering self-employment taxes.
- Operating partnerships: For businesses with partners, often owned by individual S Corps for tax efficiency.
Partnership LLCs offer flexibility, but they also come with complexity. That’s why proper structure and guidance are essential.
5. Series LLC
Purpose: Enhanced Real Estate Protection
Tax Form: Schedule E or 1065
Have multiple rental properties in one state? A Series LLC could be a game-changer.
With a Series LLC, you form one master LLC, then create “sub-series” underneath it—each with its own liability protection, without the hassle or cost of forming multiple LLCs.
- Ideal for: Real estate investors with 3+ properties in states like TX, UT, NV, IL, and VA.
- Not ideal if your properties are scattered across states that don’t recognize series structures.
Check out this blog for more info: Why a Series LLC May be Right for You
6. COPE LLC (Charging Order Protection Entity
Purpose: Advanced Asset Protection
Tax Form: Depends on structure
The COPE LLC is built to protect your assets from your liabilities (the opposite of most LLC structures). This becomes important if you’re sued personally—say, from a car accident or personal lawsuit.
Wyoming is the gold standard for COPE laws. If your net worth is $1M+, this is a must-consider strategy. It’s complex, but crucial for high-net-worth individuals.
Bonus: Special Purpose LLCs
7. IRA-Owned LLC (IRA LLC or “Checkbook Control” LLC)
Purpose: Self-Directed Investing with Your IRA
Set up correctly, your IRA can own an LLC—giving you direct control over investments like real estate, private companies, and more. Ideal for experienced self-directed IRA investors who need speed and flexibility.
8. PLLC (Professional Limited Liability Company)
Purpose: For Licensed Professionals
Doctors, dentists, lawyers, architects—this one’s for you. Many states require licensed professionals to form a PLLC rather than a traditional LLC. Be sure to check your state’s laws or talk with a lawyer before filing anything online.
Final Thoughts: Don’t DIY Your LLC
Whether you’re just starting or have multiple ventures and investments, your entity structure matters. A lot. The wrong setup could cost you thousands in taxes—or worse, leave you exposed to liability.
The more organized you are, the more successful you are.
If you’re unsure what type of LLC is right for you—or whether you’re overdue for a restructuring—schedule a consult with our legal team at KKOS Lawyers. We’ll walk you through the Trifecta strategy and build a plan tailored to your business and goals.
Also, if you’re setting an LLC, you’re going to want to do all you can to protect your personal info as well, preferably through a Registered Agent.
Check the out this blog to get the full guide: How to Protect Your Personal Info When Starting an LLC
Want to grow your business and keep more of what you earn?
The Main Street Tax Advisor Network helps business owners like you find certified, vetted professionals trained by Mark J. Kohler to deliver real tax-saving strategies.
Browse over 1,000 trusted advisors—all ready to help you reduce your tax burden and reinvest in your growth.
Free to search. Easy to connect. Built for entrepreneurs.
Ready to save more and scale smarter in 2025?
The Trifecta Planner is a business owner’s blueprint for:
- Bulletproof compliance
- Aggressive tax savings
- Long-term wealth strategy
Don’t forget to Download your FREE Tax Guide with 30+ money-saving tips to take control of your finances today.
Build your business like you mean it—with tax strategy at the core.
Want to help business owners win at tax strategy?
Grow your advisory practice and deliver real value as a Main Street Certified Advisor—trained by Mark J. Kohler.
Call 520-800-0986 or schedule your FREE Discovery Call to learn more about certification.
