What are the steps to convert an LLC to an S Corporation?

Converting your LLC to an S Corporation can be a complex process, but it's essential to understand the benefits and requirements involved. In this article, we'll walk you through the steps to change your LLC to an S Corporation.

Save 90% on your legal bills

What are the differences between an LLC and an S Corporation?

An LLC is a type of business structure that offers limited liability protection to its owners, known as members. On the other hand, an S Corporation is a type of corporation that is taxed differently than a regular C Corporation. S Corporations are pass-through entities, meaning that the business income is not taxed at the corporate level, but rather at the individual level.

What are the requirements to convert an LLC to an S Corporation?

To be eligible to convert your LLC to an S Corporation, you must meet the following requirements:

  • Your LLC must be a domestic corporation.
  • Your LLC must have only one class of stock.
  • Your LLC must have no more than 100 shareholders.
  • Your LLC must not be a financial institution or an insurance company.

How do I file Form 2553?

To convert your LLC to an S Corporation, you must file Form 2553, Election by a Small Business Corporation, with the Internal Revenue Service (IRS). This form must be signed by all shareholders and must be filed within 75 days of the start of your tax year.

What are the steps to update my business structure?

Once you've filed Form 2553, you'll need to update your business structure to reflect the change. This includes updating your articles of incorporation, bylaws, and any other relevant documents.

Do I need to obtain an EIN?

If you don't already have an Employer Identification Number (EIN), you'll need to obtain one from the IRS. This is a unique number that identifies your business and is required for tax purposes.

How do I file my taxes as an S Corporation?

As an S Corporation, you'll need to file your taxes differently than you did as an LLC. You'll need to file Form 1120S, U.S. Income Tax Return for an S Corporation, and Form 1120, U.S. Corporation Income Tax Return, if you have any non-passive income.

What are the final steps to convert my LLC to an S Corporation?

Finally, you'll need to update your business records to reflect the change. This includes updating your business licenses, permits, and any other relevant documents.

Can I convert my LLC to an S Corporation on my own?

While it is possible to convert your LLC to an S Corporation on your own, it is recommended that you consult with a tax professional or attorney to ensure that you're meeting all the requirements and taking advantage of all the benefits.

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