Although an LLC cannot simultaneously be a corporation for purposes of a state’s business entity laws, it does have the option to elect C corporation tax treatment by filing an Entity Classification Election (Form 8832) with the U.S. Internal Revenue Service (IRS).

How long do you have to elect S corp status?

two months and 15
A corporation or LLC must file an S-Corp election within two months and 15 days (~75 days total) of the date of formation for the election to take effect in the first tax year. Example: Your articles of formation was filed on August 21st. Two months later is counted to the numerically corresponding day of October 21st.

How does a corporation elects S corporation status?

Use IRS Form 2553 to file this election. Form 2553- Election by a Small Business Corporation provides the IRS with detailed information about the corporation requesting S corp status and about the corporation’s eligibility for electing this status.

How are the shareholders of a corporation elected?

The final section asks you to list all the shareholders who must consent to the election, with the number or percent of shares owned, date acquired, and tax year of each shareholder. Each shareholder must also sign and date the form. Part II includes questions about the corporation’s tax year.

What are the qualifications for S corporation status?

Corporations Qualified to Elect S Corporation Status. The IRS has 8 qualifications for S Corporation status, including: It must be a domestic (U.S.) corporation, with no foreign investors; It must have no more than 100 shareholders; It has only one class of stock; It must use a December 31 year-end.

How to elect tax treatment as a S corporation?

Once it has elected to be taxed as a corporation, it can file a Form 255 3, Election by a Small Business Corporation, to elect tax treatment as an S corporation. If you need help with S Corporation elections, you can post your legal need on UpCounsel’s marketplace.