Which statement is true regarding a Limited Liability Company (LLC)?

The statement that the owners are responsible for self-employment tax on all business proceeds is accurate when it comes to a Limited Liability Company (LLC) structure. In an LLC, the profits from the business pass through to the members, who report that income on their personal tax returns. This means that all earnings allocated to the members are subject to self-employment tax, which includes Social Security and Medicare taxes.

Understanding the tax implications is critical for those involved in an LLC, as the personal liability protection offered by the LLC structure does not extend to tax obligations. Members are taxed as self-employed individuals, which means it's essential for them to plan accordingly for these tax liabilities.

The other statements do not hold as accurately defined aspects of LLCs. For instance, while some regulations may limit the number of members, an LLC can generally have an unlimited number of members in most states, including Alabama. Additionally, there are no requirements for all members to be U.S. citizens, and one of the primary advantages of an LLC is that its members are typically protected from liability for the company’s debts and actions, contrary to the claim that all members are completely liable.