Can you tell me the pros and cons of a SMLCC choosing a taxation option as either a Sole Proprietorship or a Corporation? In a SMLCC, does the member receive a salary from the company? How should the bank accounts be set up?
State law generally governs Limited Liability Companies (both single and multiple member). Generally, a SMLLC is taxed as a sole proprietorship. In my opinion, if a start-up business owner understands and desire the arrangements a corporation offers, then s/he should incorporate rather than attempting to operate an LLC as a corporation. One's attorney should be consulted relative to a particular State's rules.
A SMLLC sole proprietor does not receive a salary with tax withholdings, etc. S/he is taxed as a sole proprietor who takes owner draws during the year, but reports the full net business income on Schedule C of Form 1040 on his or her annual tax return.
The SMLLC must apply for a federal Employer Identification Number (link below) which will typically be needed to open the company bank accounts.