Can an LLC be a shareholder of an S corporation?

Who can be a shareholder of an S corporation?

Understanding S Corporations (S Subchapters)

Specifically, S corporation shareholders must be individuals, specific trusts and estates, or certain tax-exempt organizations (501(c)(3)). Partnerships, corporations, and nonresident aliens cannot qualify as eligible shareholders.

Can a corporation be owned by an LLC?

Can an LLC own a corporation? Yes, if it is a C Corporation. If a corporation has chosen to file with the IRS to be taxed as an S Corporation, an LLC (Limited Liability Company) may not have ownership over it as S Corporations may only be owned by natural persons. … So, LLCs can own a C Corp, but not an S Corp.

Can an LLC own an LLC taxed as an S Corp?

A corporation electing under IRC section 1362 to be taxed as an S corporation is subject to various ownership restrictions, including the requirement that shareholders must be individuals (section 1361(b)(1)(B)).

Can a single-member LLC be an S corp?

Similar to how a corporation elects S corp status, a single-member LLC can become an S corporation by filing IRS Form 2553. The LLC must file the election no later than two months and 15 days from the start of the tax year in which the S corp status will be effective.

Can an S corp be a shareholder of another S corp?

In general, corporations aren’t allowed to be shareholders. The only exception that allows an S corp to own another S corp is when one is a qualified subchapter S subsidiary, also known as a QSSS. … The original business can own the new business as an S corp if it owns all of the shares.

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Can a holding company own an S corp?

In the S corporation holding company structure, a newly formed corporation becomes the holding company. The S election for the existing S corporation continues for the newly formed corporation. The original S corporation becomes a wholly owned subsidiary of the newly formed corporation.