What Does Sole MBR Mean
When reviewing your LLC paperwork, you might notice “Sole MBR” listed on various different official IRS documents — while seemingly quite simple, many of our readers can find themselves a little confused as to what this term actually means and how it affects their LLC’s compliance with IRS requirements.
In this What Does Sole MBR Mean article, we’ll explain everything you need to know about this term, including what it means for your LLC, where you can typically find it, and what to do if you think it might be incorrect.
Sole MBR Meaning
Put simply, the term “Sole MBR” is an abbreviation for “Sole Member” that the IRS uses when handling EIN applications to indicate that an LLC’s EIN Responsible Party is its only member — or in other words — that the business is a Single-Member LLC.
The IRS will either assign your LLC the term “Sole MBR” (for Single-Member LLCs) or “MBR” (for Multi-Member LLCs) based on the information that you provided when applying for an Employer Identification Number (EIN).
In particular, they’ll draw this conclusion from the information you give in response to the question “How many member(s) are in the LLC?” on your EIN application — which you’ll encounter regardless of whether you filled it out online or using Form SS-4.
The IRS describes the EIN Responsible Party as the member “who exercises ultimate effective control” over your LLC. However, it doesn’t technically need to be the actual owner of your LLC, since any of your members can be appointed to this role.
With that being said, it’s best to appoint a more senior member, as this individual will be responsible for ensuring taxes are handled properly and communicating with the IRS on your LLC’s behalf.
Where You Might See “Sole MBR”
Ok, so you understand what the terms “Sole MBR” and “MBR” mean — but where exactly can you find them listed to confirm that the IRS has correctly identified your LLC’s member status and EIN responsible party?
The term most commonly shows up on IRS documentation, particularly your:
- EIN Online Application: If you apply for your LLC’s EIN online, you should find the term “MBR” or “Sole MBR” next to the individual listed as the Responsible Party on the final review page.
- EIN Confirmation Letter (CP 575): After completing the application, you should receive an EIN Confirmation Letter that includes either “MBR” or “Sole MBR” at the top of the document.
- EIN Verification Letter (CP 147C): When requesting official verification of your LLC’s EIN from the IRS, you’ll receive a letter which displays “MBR” or “Sole MBR” in the entity information section near your LLC’s legal name and EIN number.
These are some of the most likely places you’ll encounter these terms, though you might also find them included in follow-up communications with the IRS regarding your LLC’s classification or tax obligations.
Remember that before you can apply for your EIN, you must have formally organized your business as an LLC first. To avoid any hassle or potential delays when completing this step, we always encourage our readers to consider a professional LLC formation service.
If you’re interested in using a professional service to form your LLC, we recommend going with Northwest as you’ll also get one year of registered agent services free of charge.
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What If Your Member Status Is Listed Incorrectly?
When reviewing your IRS documentation, the terms “MBR” and “SOLE MBR” should accurately reflect your LLC’s ownership structure. However, mismatches between these designations and your actual business setup are a common source of concern for LLC owners.
Below, we’ve examined the most common scenarios where your member status might appear incorrect, helping you determine if action is needed and providing the relevant solution where necessary.
Your Single-Member LLC is Listed as “MBR”
If you’re currently the only member of your LLC, you might be worried about potential filing errors or complications after noticing “MBR” instead of “SOLE MBR” on any of your IRS documentation.
Fortunately, this error does not require any special amendments or forms to be fixed, as it can be resolved by just filing your taxes as normal. Since your LLC’s tax treatment by the IRS follows your actual business structure under state law, this will supersede whatever was indicated on your EIN application.
What To Do: All you need to do to fix this error is report your business income using an Individual Tax Return (Form 1040) with Schedule C — by using this instead of the form for partnerships, you’ll automatically signal to the IRS that your LLC has only one member, and they’ll update their records.
Your Multi-Member LLC is Listed as “SOLE MBR”
If your LLC has multiple members but any of your IRS documentation instead shows “SOLE MBR”, you might have accidentally entered the wrong number of members during the EIN application process.
While this might seem concerning — especially if you’re worried about any compliance issues with the IRS — there’s no need to panic, as this error can easily be corrected without the need for any special paperwork.
What To Do: Simply file a Partnership Tax Return (Form 1065) instead of using the form for individual tax returns. This immediately informs the IRS that your LLC has multiple members for tax purposes, which will be applied regardless of what you initially indicated on your EIN application.
The EIN Responsible Party Is Incorrect
If you discover that your EIN documentation lists the wrong individual as the EIN Responsible Party for your LLC, you’ll need to follow a slightly different correction process than with issues concerning your member status.
Unlike membership errors that can be resolved through tax filings, updating your LLC’s EIN Responsible Party will require you to get in direct contact with the IRS through the use of a specific form.
What To Do: You’ll need to submit Form 8822-B (Change of Address or Responsible Party) to the IRS by mail (address in section below), which specifically handles Responsible Party updates and will ensure that the correct person is officially recognized for tax purposes.
The EIN Responsible Party’s Name Is Misspelled
If the correct person is listed as the EIN Responsible Party but their name is spelled incorrectly, you can request a change by mailing a letter to the IRS that contains all of the following:
- Your LLC’s full business name
- The date you wrote the letter
- Your Employer Identification Number (EIN)
- Your LLC’s official business mailing address
- Your printed legal name
- Your position within the company
What To Do: Once you’ve drafted up a letter containing all of the above information, you’ll need to send it to the IRS by mail at the following address:
Department of the Treasury
Internal Revenue Service
Ogden, UT 84201
Don’t be alarmed if you don’t hear back from the IRS for a while, as they typically take up to three months in order to respond to mail requests.
What Does Sole MBR Mean FAQs
The abbreviation “MBR” stands for “Member”, which is a term commonly found in official IRS documents to describe an LLC’s EIN Responsible Party as one of several members within the company.
In other words, this designation is used by the IRS to indicate that a business is a Multi-Member LLC (i.e., that it has a number of owners).
No, the term “Sole MBR” is used by the IRS to describe an LLC’s EIN Responsible Party as its “sole member” of the business. By contrast, the term “sole proprietor” describes an individual who owns and operates a business without forming a separate legal entity.
You can read about this topic in more detail in our What Does Sole MBR Mean article.
Being the sole member of an LLC means you are the only owner of the business, and thus have full control over decision-making and operations while enjoying personal liability protection from the LLC’s debts or obligations.
If you’re interested in finding out more, be sure to check out our state-specific How to Start an LLC guide.
Your EIN letter says “Sole MBR” because the IRS recognizes you as the sole owner of the LLC.
Since this designation is assigned by the IRS based on the information you provided on your EIN application, you must have answered that your LLC only has a single member.