I was doing the books for an LLC last year and our accountants told us that paying one of the members via payroll was not the correct way to pay them and that the member should be paid via a distribution check. Is this a choice? or is this required by law?
(related question LLC, how to get paid? )
This is your choice. Members of an LLC may be paid "via payroll", but you must withhold Social Security, Medicare, Federal, State, unemployment taxes and more. Additionally, your LLC must pay for the company's share of Social Security & Medicare, making this a more expensive option for your LLC.
If you pay via a distribution, you do not have to withhold or pay the employer portion. However, all members must get pro-rata distributions based on their ownership %'s.
Finally, paying via payroll shows as an expense to your LLC & weakens your P&L (harder to borrow money, etc). A distribution happens after your P&L.
However, all members must get pro-rata distributions based on their ownership %'s. This is not required unless specified in your operating agreement.