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Washington Mergers & Acquisitions Questions & Answers

1 Answer | Asked in Business Formation, Business Law and Mergers & Acquisitions for Washington on

Q: A foreign company wants to purchase part of my LLC. Do I have to reform as a C-Corp?

As an LLC, we file as an S-Corp for federal taxes. We have an existing contract with the foreign company for services, resulting in expected revenue for 3 years. Can they purchase part of the LLC even though we file as an S-Corp? Or should we reform as a C-Corp. What then becomes of the existing... Read more »

Jonathan R. Roth answered on Sep 15, 2017

You would have to elect to be taxed as a partnership or as a C-Corp. A foreign entity cannot own part of an S-Corporation. However depending upon the purpose of the investment and the nature of how you want to operate there may be an alternative set of structures to accomplish your goal.

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