Can You Convert From LLC to C Corp?

Converting a Business Entity

LLCs offer flexibility and help simplify taxation and maintenance. C Corps allow raising money through investors or taking a company public. Changing from LLC to C Corp is a big step.

Business Entity Comparison

An LLC offers limited liability and pass-through taxation. A C Corp has double taxation for profits and dividends. Once income hits high brackets, adapting to a C-corp can benefit.

Converting from LLC to C Corp

  • Can you turn your LLC into a Corp?
  • Yes, you can convert your Limited Liability Company (LLC) to a corporation. However, understanding the income tax consequences of such a conversion is essential.

Conversion Process

  • There are three different ways to change your LLC into a C Corp.
  • One of the key benefits of converting from an LLC to a corporation is the ability to raise capital.
  • How to convert an LLC into a C Corp: Statutory Conversion.

Tax and Employer Identification Number (EIN) Considerations

  • Does EIN change when converting from LLC to C Corp?
  • You will need to obtain a new EIN if certain conditions are met.
  • An explanation on the necessity of a new EIN when converting a business structure.

Conclusion

  • Tax issues can be paramount in considering a conversion from an LLC to a corporation. The company’s accountants should calculate the tax effects of the conversion prior to undertaking it.
  • There are four commonly used ways to convert an LLC to a corporation and one much less common way.

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