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4 Replies Last post: Nov 26, 2007 8:01 AM by Ed O'Gee

LLC Tax Filing as C-Corp Process?

Nov 24, 2007 11:28 AM

FlixInABox27 6 posts since
Nov 24, 2007

After 3 years of operations, we're finally getting healthy income and our company is looking into filing our 2007 tax as an LLC filing as C-corporation.

We got an advise last time that as soon as your company is generating good income, filing as a C-corporation will be better in the long term.

My question now is what is typical the process to do such election? Is this just a one-time "fill-up an IRS form type" of activity or we need to know and prepare (consult with a lawyer or accountant?) ahead on how to maximize this C-Corporation tax filing....

Tags: llc_filing, corp_filing Report as inappropriate

Lighthouse24 2,396 posts since
Oct 10, 2007

1. Re: LLC Tax Filing as C-Corp Process? Nov 24, 2007 12:24 PM

Form 8832 is the Entity Election Classification form that applies. Once you change your classification, you can't change it again for five years -- so it would probably be a good idea to consult with an accountant first.

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BDS INC 131 posts since
Jul 20, 2007

2. Re: LLC Tax Filing as C-Corp Process? Nov 25, 2007 10:39 AM

Lighthouse is correct but my question is who told you, that once profitable a C-corp is the way to go? It really depends on the business structure. Do you have multiple partners? Would anyone what to sell their stake in the company in the near future? The real advantage isn't one of tax but one of transfer of ownership, voting proxy, etc.

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FlixInABox27 6 posts since
Nov 24, 2007

3. Re: LLC Tax Filing as C-Corp Process? Nov 25, 2007 3:44 PM

in response to: BDS INC

We have multiple partners (managing and investors) and we do want to have such flexibility to sell/expand our investors. Here is my piggyback question on this topic, what is the difference/benefit then of an entity working as an LLC (filing as C-Corp) versus changing our structure entirely to C-Corp...?

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Ed O'Gee 215 posts since
Oct 25, 2007

4. Re: LLC Tax Filing as C-Corp Process? Nov 26, 2007 8:01 AM

in response to: FlixInABox27

BDS hit the nail on the head, the real advantage of switching over totally to a C-corp is the transfer of shares and voting. With a C-corp you can create the company By-laws, you can create a board if you wish, it just makes governing, selling, and transfering the business so much easier than an LLC. I think your organization (based on the little you've told us) should really be a C-corp, given the number of partners and your wish to sell and expand your businesses.

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LLC Tax Filing as C-Corp Process?

Nov 24, 2007 11:28 AM

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