Question: Can S Corp Own LLC?

Question: Can S Corp Own LLC?

An S corp may own up to 100 percent of an LLC, or limited liability company.

While all but single-member LLCs cannot be shareholders in S corporations, the reverse — an S corporation owning an LLC — is legal.

The similarity of tax treatment for S corps and LLCs eliminates most of the common concerns about IRS issues.

Why would an S Corp own an LLC?

LLCs can buy into any other business entity, because they have the legal ability to own property and manage assets. An LLC can act as an investor in a corporation just like an individual would, but S corporations can only be owned by actual individuals. In the terms of an LLC, an S corp can have membership in an LLC.

Can an S corp be an LLC?

However, an LLC can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election. And, once it has elected to be taxed as a corporation, an LLC can file a Form 2553, Election by a Small Business Corporation, to elect tax treatment as an S corporation.

Can an S Corp own real estate?

An S corporation does not pay taxes at the corporate level. The benefit of using an S corp or LLC to own property is they are treated as a separate entity that is responsible — as opposed to shareholders or members — for any liabilities that may arise from the real estate investment.

Photo in the article by “Cyberspace Law and Policy Centre”