Legal Question in Business Law in Massachusetts

Re: llc formation aid

You have the wrong terms.

LLC stands for "Limited Liability Company" and is not a kind of corporation at all.

An LLC can be taxed as a partnership, a corporation, or a "disregarded entity" depending upon what the LLC elects and/or its ownership structure.

An LLC owned by one person is ignored for tax purposes. An LLC owned by two or more people is taxed as a partnership unless the LLC files an election with the IRS to be taxed as a corporation. If it does so, and the ownership of the LLC would allow an election under Subchapter S if the LLC were a corporation, then the LLC can bring itself under Subchapter S too.

There is actually no entity difference between a corporation that is taxed under Subchapter C and one taxed under Subchapter S; these are tax categories rather than differences in entity types.

Hope that this helps, best wishes,

LDWG