I am the sole member of an Ohio (US) LLC. I stand to make significantly
more than the minimum reasonable salary in my field, so I wish my
company were an S Corporation instead of an LLC. Ohio does not allow
a company to change entity types. I could dissolve the LLC and form
the S Corporation but I worry that it will cause a big headache with
existing clients with whom I already have accounts.
Can I form a new S Corporation and then transfer ownership of the LLC
from myself to the S Corporation? (Can S Corporations own LLCs?)
If I do this, will I be able to separate dividends from salary as I
desire to without incurring other taxes?
As a bonus, is there anything else I can do to save even more? For
instance, if I make my wife 100% owner of the S Corporation and make
myself an employee only, does that affect the requirements to maintain
a reasonable salary? (assume that I understand there are risks in
making someone else, even my wife, 100% owner) |