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LLC, taxed as a C-corporation, enters into partnership with a sole-proprietorship.

Los Angeles, CA |

If LLC, taxed as a C-corporation, enters into partnership with a sole-proprietorship, does the LLC keep its tax classification as a C-corporation?

Attorney Answers 3


Yes, that remain in place until the LLC elects to change its status by filing the requisite IRS form(s).

Most states allow a single member LLC. This is being recommended by tax practitioners to replace the sole proprietorship. In general it provides liability protection and an uncomplicated tax picture.

I suggest consulting with a tax advisor, business lawyer and CPA.

Disclaimer Information on this site is provided by Brian Scott Wayson as general information, not legal advice, and use of this information does not establish an attorney-client relationship. If you have questions about your specific situation, please call an attorney.

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Yes, the partnership would not alter the tax status of your LLC. Tax status, in this case, must be changed manually by filing with the IRS and FTB, if desired.

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I agree with my colleagues: the LLC's status as a C corporation is unchanged. Be advised, however, that the partnership will be required to use the accrual method of accounting as it is considered a partnership with a C corporation partner.

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1 comment

Justin C. Lowenthal

Justin C. Lowenthal


Interesting point, Robert. Thank you.

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