Carl
Level 15

Business & farm

Just to help clarify things in case you have future questions, since you've filed the 2553 to have your LLC "treated like an S-Corp" for tax purposes only, there's really no need *in* *this* *forum* to even reference the business as a LLC.

When you file the form 2553 for this, they you are required to follow all the laws, rules and regulations at the state and federal level that apply to an S-Corp. This includes things like the owner(s) taking the yearly required RMD's, and filing quarterly board meeting reports with the state.

In other words, if you elect to be "Treated" like an S-Corp, then the business must *act* like an S-Corp.

I myself can't wrap my head around why someone would do this, though I"m sure there are reasons. It seems to me that it would just make more sense to either register as an S-Corp from the start, or just convert to an S-corp by incorporating the LLC.

It doesn't make sense to me because the 2553 election is *for* *tax* *purposes* *only* and that's it. So if a customer sues your business, they are NOT suing an S-Corp - they are suing a disregarded entity which means the owner(s) personal assets are still at risk.