LLC to Corporation Conversion
Changing a business entity from a Limited Liability Company (LLC) to a corporation can result in a modified business structure and tax return. An LLC is considered a pass-through entity for income tax purposes, while a corporation is not.
Advantages of Converting
One of the key benefits of converting from an LLC to a corporation is the ability to raise capital. Corporations can issue stock, which can be sold to investors.
Considerations and Process
Weighing the benefits against the disadvantages of moving from an LLC to a C Corporation will need to be factored into your decision-making process.
- The ideal timing is tricky. One trigger is plans for a public stock offering.
- Conversion methods to research include statutory and nonstatutory options.
- Legal help can simplify the process.
- Reasons to switch include easier stock compensation and potential tax savings.
LLC to C Corporation Conversion – Decision and Process
Weighing the benefits against the disadvantages of moving from an LLC to a C Corporation — as well as the steps involved in making the change — will also need to be factored into your decision-making process.
It’s difficult to pinpoint the right time to convert your LLC into a corporation, but a few general guidelines can offer some help. For example, you need to make the switch if you’re considering a public offering of stock in the future.
Steps to Convert
To simplify things, you can learn how to convert your LLC to a corporation by choosing one of the methods below. This will give you a better idea about the process – a process that can be done, with the help of a competent attorney, more easily.