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    0 Replies Latest reply on Jan 11, 2010 8:02 PM by entrep1

    C Corp as Parent Company with LLC offshoots?

    entrep1 Newbie
      Hello all! I have been an entrepreneur for 3 years now, had relatively good success and some good failures, but am still here plugging away - so I must be doing something right!

      I have a question for the community, I am trying to organize a collection of business' that do a wide variety of things (everything form web design to product development) I beleive I have finally found the correct setup but need a little guidance. I know there will undoubtedly be more questions, but here goes.......

      I want to form a parent company that owns all the other companies, Currently in the mix is a C Corp and several sole props that I intend on turning into LLC's. I am looking at this from a tax and financial standpoint, liability issues are all dealt with. My main thought was that the parent company should be a C Corp, which funds all the off shoot LLC's and and is classified as a managing member of the LLC's as well. Additionally my wife and I would be managing members of the LLC's as well (and of course any partner that might come into the mix of these business') So if the C Corp funds all of these business's and loans the money as an "investor" to the LLC's, then technically I could wipe out a large chunk of the profits that come both to my wife and me and to the C Corp through investor agreements which require loan repayment and interest, the rest would flow to my wife and I's personal returns as a typical LLC would. Basically the idea is to create a situation where money is constantly being owed to other entities essentially wiping the majority of profits out until a specific LLC became profitable, then turn it into a C Corp where we would then be managing money on a different level. I would also like have a stopping point before money that flowed into the parent C Corp flowed to us, i've considered forming another C Corp that is setup as a "consulting" firm that again acts as another buffer before money flows back to us.

      Is this legal? I really don't want to end up in Federal Prison!!! Is there an easier way? I think optimally it would be best if everything was a corporation, but I don't want to get tied to all that paperwork and accounting. Any thoughts on my mastermind would be greatly appreciated!!!!