A disregarded entity is a business that is legally separate from its owner but ignored for US federal income tax — its income is reported on the owner's return instead. A single-member LLC is the most common example, so a one-owner US LLC is taxed as if the entity did not exist.
How a disregarded entity works
The entity is real for liability and contracts, but invisible to the IRS as a separate taxpayer.
By default, the IRS treats a domestic single-member LLC as a disregarded entity unless it elects to be taxed as a corporation. That means there is no separate federal income tax at the LLC level — profits and losses flow straight to the single owner, who reports them on their own return. The LLC still exists for legal purposes, can hold a bank account, and still needs its own EIN to operate.
Why it matters for a global or India-based founder
For a non-US founder, "disregarded" does not mean "nothing to file."
A US LLC owned by one non-resident is a disregarded entity, so it usually owes no US federal income tax on foreign-sourced work — but the IRS still requires an annual information return. You must file Form 5472 attached to a pro forma Form 1120 every year, even with $0 activity, and skipping it carries a $25,000 penalty per form. You also need an EIN before you can file or open a bank account.
Default status for a single-member LLC — no separate federal income tax at the entity level.
Still a real legal entity: limited liability, contracts, and its own bank account.
Non-resident owners must still file Form 5472 with a pro forma Form 1120 annually.
Requires an EIN — see how to get an EIN without an SSN.
Where it fits with StableCorp
A disregarded-entity LLC is the typical structure for a solo founder getting paid by US clients, and StableCorp runs the full path around it — formation, EIN, US bank account, then USD and USDC/USDT payments on compliant rails. When that USDC reaches an Indian founder, you off-ramp to INR through proper RBI purpose codes with a real paper trail, not the grey-area direct-wallet route. See the Form 5472 rules for a foreign-owned LLC or pricing.
This is general information, not tax or legal advice.
Sources
IRS — Single Member Limited Liability Companies — https://www.irs.gov/businesses/small-businesses-self-employed/single-member-limited-liability-companies
IRS — Instructions for Form 5472 — https://www.irs.gov/instructions/i5472