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Q: Creating an S Corp to buy my LLC ( No Answer,   0 Comments )
Question  
Subject: Creating an S Corp to buy my LLC
Category: Business and Money > Small Businesses
Asked by: codewarren-ga
List Price: $20.00
Posted: 06 Jul 2006 14:00 PDT
Expires: 05 Aug 2006 14:00 PDT
Question ID: 743886
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)
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