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Can a WA business entity be both an LLC and A C corp at the same time?

Seattle, WA |

I have heard two CPAs recently recommend that a business entity be both an LLC and a C corporation at the same time. The expressed rationalle is that since the IRS does not recognize the LLC formation, by being both, you can get the benefits of each.

This doesn't make sense to me. Is it possible for a business entity to be and LLC and a C corp at the same time?

Attorney Answers 4


  1. Best answer

    LLC and corporation are two different legal entities - no entity can be both at the same time.

    Perhaps the point being made is that the default tax treatment for an LLC is pass-through, like an S corporation. You might find the post at the link below informative.

    Disclaimer: This post does not constitute legal advice and does not establish an attorney-client relationship.


  2. No. The IRS does recognize LLCs and allows you to elect corporate taxation if you wish. I suggest you find new accountants.

    This response is for informational purposes only and is not offered as legal advice.


  3. The above answers are correct and I believe that Dana has hit the nail on the head. The IRS does not recognize the LLC form, which is a creature of state statutory law.

    The IRS considers your LLC as either a partnership or a corporation for purposes of your business' income tax. So, your accountants may be correct (though they are not explaining it clearly) in saying that you are a state LLC, but treated as a corporation by the IRS, if you have filed for S-Corp status.

    Disclaimer: This response is made purely for educational reasons and I am not your attorney. You should refer all legal questions to your own counsel before making decisions.


  4. You can be an LLC for state law and a C corporation for federal income tax purposes. The LLC is a state law entity; the entity's federal tax classification is a matter of federal tax law. If you form a state law LLC, you can check the box to be taxed as a corporation and then you would be taxed as a C corporation, but you would be an LLC for state law purposes.

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