Transforming Your LLC to an S Corporation: A Step-by-Step Guide

Learn how to convert your Limited Liability Company (LLC) to an S Corporation, including the eligibility requirements, steps to follow, and tax implications.

Save 90% on your legal bills

Are you looking to turn your Limited Liability Company (LLC) into an S Corporation? This guide will walk you through the process, highlighting the key steps and considerations to ensure a smooth transition.

Why convert your LLC to an S Corporation? S Corporations offer several benefits, including:

  • Pass-through taxation, where profits and losses are passed through to the shareholders' personal tax returns.
  • Limited liability protection, shielding shareholders from personal liability for the company's debts and obligations.
  • Flexibility in ownership structure, allowing for multiple classes of stock and transferable shares.
  • Before we dive into the conversion process, it's essential to understand the eligibility requirements for S Corporations. To qualify, your LLC must:

    • Be a domestic corporation.
    • Have no more than 100 shareholders.
    • Have only one class of stock.
    • Not be an ineligible corporation, such as a financial institution or a insurance company.
    • If your LLC meets these requirements, you can begin the conversion process. Here are the steps to follow:

      1. File Form 2553 with the IRS: This form is used to elect S Corporation status. You'll need to file it with the IRS within 75 days of the start of your tax year.
      2. Update your articles of incorporation: You'll need to amend your articles of incorporation to reflect the change in status. This may require filing a new document with your state's business filing office.
      3. Update your bylaws: Your bylaws should be amended to reflect the new S Corporation status.
      4. Notify your shareholders: You'll need to notify your shareholders of the conversion and provide them with any necessary documentation.
      5. File Form 1120S with the IRS: This form is used to report your S Corporation's income, deductions, and credits.
      6. File Form 1065 with the IRS: This form is used to report your S Corporation's partnership income, deductions, and credits.

      It's essential to note that converting your LLC to an S Corporation can have tax implications, so it's recommended that you consult with a tax professional or attorney to ensure you're meeting all the necessary requirements and taking advantage of the benefits.

      By following these steps, you can successfully convert your LLC to an S Corporation and enjoy the benefits that come with this status.

Legal help, anytime and anywhere

Join launch list and get access to Cimphony for a discounted early bird price, Cimphony goes live in 7 days
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Unlimited all-inclusive to achieve maximum returns
$399
$299
one time lifetime price
Access to all contract drafting
Unlimited user accounts
Unlimited contract analyze, review
Access to all editing blocks
e-Sign within seconds
Start 14 Days Free Trial
For a small company that wants to show what it's worth.
$29
$19
Per User / Per month
10 contracts drafting
5 User accounts
3 contracts analyze, review
Access to all editing blocks
e-Sign within seconds
Start 14 Days Free Trial
Free start for your project on our platform.
$19
$9
Per User / Per Month
1 contract draft
1 User account
3 contracts analyze, review
Access to all editing blocks
e-Sign within seconds
Start 14 Days Free Trial
Lifetime unlimited
Unlimited all-inclusive to achieve maximum returns
$999
$699
one time lifetime price

6 plans remaining at this price
Access to all legal document creation
Unlimited user accounts
Unlimited document analyze, review
Access to all editing blocks
e-Sign within seconds
Start 14 Days Free Trial
Monthly
For a company that wants to show what it's worth.
$99
$79
Per User / Per month
10 document drafting
5 User accounts
3 document analyze, review
Access to all editing blocks
e-Sign within seconds
Start 14 Days Free Trial
Base
Business owners starting on our platform.
$69
$49
Per User / Per Month
1 document draft
1 User account
3 document analyze, review
Access to all editing blocks
e-Sign within seconds
Start 14 Days Free Trial

Save 90% on your legal bills

Start Today