I have several small LLCs who file a 1065 and a 568. They are able to answer yes on Item 4 on page 2 and are not required to fill out the M1, M2 or Schedule L. The 1065 doesn't have an amount for the total assets at the end of the year Item F and you can e-file. The 568, however, will not allow you to e-file the state return without an end of year total assets and there is no way to put in the amount. If you type in the balance, the system removes it and posts a fatal e-filing error. Even if you manually enter a schedule L on the 568, it doesn't transfer to and just gives you an additional error.