Might you at any point set up a C Corp to run LLC? Yes!
Choosing your business structure type is a crucial decision for small business owners. Your business element type affects several major factors in your business, including adaptability, ease in securing funding, the level and sort of taxation, assurance from personal liability, and more. That is the reason your element type needs to line up with your business and goals.
For the most part, some random business will choose one normal sort of business structure:
Limited Liability Company (LLC)
Sole proprietorship or a corporate structure (such as a C Corporation or a S Corporation)
But what happens to make a C Corp? Would you like to maintain a LLC's advantages while also profiting from establishing a C Corp?
There are many reasons you should make a C Corp. For instance, a C Corp is required to use some advantageous funding methods, such as Rollovers for Business Start-ups (ROBS).
The uplifting news? You can keep an existing LLC inside a C Corp — or make one to be purchased and run by a C Corp!
Before we jump into how to set up a C Corp to run LLC, we should momentarily separate every one of these business structures and look at their advantages and likely drawbacks.
What are Limited Liability Companies (LLCs)?
A LLC protects business owners from personal liability in case of debts or different liabilities. Since a LLC is somewhat new, the IRS doesn't have a specific tax class for this business substance type. That means a LLC uses tax categories of other business types.
A single-member LLC is taxed as a sole proprietorship. In the event that there are multiple members, the pass-through taxation is at the same rate as partnerships. (LLC owners are called members.)
A LLC's profits or losses are passed through to the members, who then pay by means of personal tax returns. (A LLC is considered a pass-through substance.) So, LLCs can avoid making good on specific taxes, as corporate franchise taxes.
LLCs are generally simple to set up, and almost any individual or substance can do as such. But there is one outstanding exemption: Banks and insurance companies are not legally permitted to be LLCs. Regulation takes place through the individual states.