Should I Change My S Corp to an LLC?

Converting Corporation to LLC

• Evaluate current business structure
• Consider benefits of LLC, like limited liability protection
• Plan the conversion process

Switching from S Corp to LLC

• Discuss pros and cons with directors
• Decide on multi-member or single-member LLC
• Consider tax filing requirements and consequences depending on state

Strategies for Conversion

• Use the "LLC drop-down" for tax-free conversion
• Consider tax implications when self-employment tax exceeds S Corp tax burden
• Elect for federal taxation as a Corporation to convert LLC partnership to S Corp

Consultation and Process

• Consult attorney or CPA before converting
• File new formation documents or use statutory conversion for S-corp to LLC transition

Reasons for Choosing LLC over S Corp

• Evaluate benefits of LLC, like unlimited shareholders and fewer formalities
• Consider advantages of LLC drop-down and tax implications

Why Change from Corporation to LLC

• Evaluate current business structure and benefits of LLC
• Discuss pros and cons of transition with directors
• Consider advantages of LLC over S Corp

Conversion Considerations

• Evaluate tax, profits, losses, and management aspects
• Merger process transfers assets and liabilities automatically