Can a PLLC be an S Corp?

S Corporations (S Corp) and Professional Limited Liability Companies (PLLC) are two separate legal structures that offer their owners limited liability protection. A limited liability company (PLLC) is created specifically for licensed professionals including lawyers, accountants, and physicians. A corporation that has chosen to be taxed under Internal Revenue Code Subchapter S is known as a S Corp.

Is a PLLC eligible to form a S Corp? Yes, by submitting Form 2553 to the IRS, a PLLC may decide to be taxed as a S Corp. Before a PLLC may make this decision, though, a few conditions must be satisfied. The PLLC must first be qualified to receive S Corp tax treatment. It can only have one class of stock and no more than 100 stockholders, all of whom must be citizens or residents of the United States.

How long does it take to establish a PLLC, in addition? Depending on the state in which the PLLC is being formed, the formation procedure usually takes a few weeks. A PLLC can be created by selecting a name for the business, submitting articles of formation to the state, acquiring any required licenses and permits, and creating an operating agreement.

Therefore, do you send a PLLC a 1099? Typically, the answer is no. Due to the fact that a PLLC is regarded as a distinct legal entity, the IRS does not compel firms to issue a 1099-MISC to it. But if the PLLC is taxed as a partnership, the company could have to send the PLLC a 1099-MISC for any payments paid for services provided.

Is an LLC a PLLC? No, a PLLC is not the same as an LLC. A PLLC is created especially for licensed professionals, even though both companies offer their owners some limited liability protection. A PLLC must have at least one licensed member who is qualified to work in the industry for which it was created.

Is a PLLC consequently regarded as a corporation? A PLLC is, in fact, treated as a corporation for taxation purposes. A PLLC, however, is not the same as a conventional company because it is created expressly for licensed professionals, which is a crucial distinction to make. Furthermore, PLLC regulations may differ from those that apply to conventional organizations.

In conclusion, a PLLC has the option to decide to be taxed as a S Corp, but doing so has certain prerequisites. A PLLC can be formed over the course of several weeks, and typically a 1099-MISC is not given to the PLLC. A PLLC is not the same as an LLC, but for tax reasons, it is treated as a company.