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    2 Replies Latest reply on Jun 7, 2011 3:38 PM by joegelet

    Sole Proprietorship or LLC?

    Larios101 Newbie
      Ok, I have not register my business yet and I need little guidance help. I am a Sole Proprietor and I want to be LLC, is business entity still Sole Proprietor when i register with Virginia State Corporation commission? I know that i have to register fictitious name, but will entity still be sole?

      Thank you guys,
        • Sole Proprietorship or LLC?
          Eric Perkins Newbie

          The default rule for federal income tax purposes is that a single-member LLC will be viewed by the IRS as a disregarded entity (i.e., it will be taxed as a sole proprietorship).  The LLC could, however, elect to be taxed as either a "C" corporation or an "S" corporation, but that decision should be made with the advice of an accountant and an attorney as such a decision has both legal and tax implications. 

           

          It is easy to get confused in this area because state law and tax law can view the single-member LLC differently.  The nature of an LLC under state law does not change, but an LLC's treatment under the Internal Revenue Code can vary depending upon its default classification and whether an election is made for the LLC to be taxed differently.