Can 2 people own a S CORP and call the company LLC

Forum|Forum|4 years ago
February 7, 2022
2 replies
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ProSeries Professional

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George4Tacks

Level 15

The S Corp can convert to an LLC. This not something that a preparer would facilitate. Research the tax consequences and advise them to seek legal counsel.

Answers are easy. Questions are hard!

qbteachmt

Level 15

"and call the company LLC"

They would be, for instance:

LLC Incorporated

They don't "own" the S Corp. They would be the Shareholders. A Corporation is treated as its own entity; the Supreme Court ruled on that. This is why they get paid through payroll as employees of the Corporation.

Did your clients form this S Corp together? Or, did they start as an LLC? Is that an ongoing business but they are changing their entity, or decided to become partners when one of them already did this work?

All of that matters to the CPA/Legal guidance they need. I like to go sit in on it, because later, they won't use the right words when they try to explain it all to you 🙂

Don't yell at us; we're volunteers

J

jerjev2Author

Level 3

Thank you for your advice, I have to ask the client if it started as a LLC or a S. Corp. I will ask them. Thank you again for assisting.

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