however, there’s another advantage to an llc that can be quite significant—depending on the circumstances—and that’s the flexibility of llc profit distribution. the llc’s members include their share of the llc profits on their personal tax returns. in this way, a member’s ownership interest in the llc can be readily identified. state rules provide for the allocation of llc profit according to each member’s percentage of ownership interest. regardless of the type of profit allocation arrangement the members agree on, it’s crucial to document the arrangement itself in the llc’s operating agreement.