Can a C Corporation enter into an LLC as a member?
Can a C Corporation enter into an LLC as a member? We are a C Corporation in Illinois and we are looking at entering an LLC with 2 individual partners in California. Can we enter under the name of our C Corporation rather than as individuals? If so how will the Corp be taxed? Thank you.
Asked on 5/20/02, 8:32 pm
2 Answers from Attorneys
Jeff Lambert
Attorney at Law
Re: Can a C Corporation enter into an LLC as a member?
Only individuals can be members of LLC's in California. However, even if one assumed a "C" corporation was entitled to be a member of an LLC, the tax treatment would be based on the election made by the LLC. In other words, LLC's can make an election to have partnership or corporate tax treatment when the LLC is formed. As you readily will note, this would cause difficulty were corporations entitled to be members of an LLC because of possibly conflicting tax treatment rules that would be created if the LLC has chosen partnership tax treatment.
Answered on 5/21/02, 1:26 pm
Amy Ghosh
Law Offices of Amy Ghosh
Re: Can a C Corporation enter into an LLC as a member?
My understanding is that to enter an LLC you have to enter as an individual. As to tax consequences..I need to research that issue. You should hire a Local CA attorney to oversee this partnership formation along with contracts, etc. If I be of any assistance ...call me!!!!
Answered on 5/20/02, 10:59 pm
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