THIS IS AN ADVERTISEMENT
(513) 943.6650

Limited liability company taxation

May 19, 2014

There is a common misconception that a limited liability company is a type of taxable entity for federal taxation purposes.  In other words, a client believes that the company will be taxed as a “limited liability company.”  Instead, a limited liability company has the flexibility in choosing how it is taxed for federal taxation purposes.  By default, a limited liability company with one member is taxed as a sole proprietorship, and a limited liability company with multiple members is taxed as a partnership.  Any limited liability company can elect to be taxed as a C corporation.  A limited liability company that meets certain requirements can elect to be taxed as an S corporation.  Further, the type of taxation that applies to a limited liability company can change over the entity’s life.  Our attorneys can assist you with determining what type of taxation makes sense for your limited liability company.