Sub LLC and tax status
Hypothetical question for a setup of a holding company: If a holding company (LLC) is setup as a C-Corp because of an LLC that has an equity position in the holding company, but the holding company will have a sub LLC for liability purposes can the sub LLC be setup as an S Corp for taxation? A specific example is the holding company owns 100% of the sub LLC, but would like to offer equity in the sub LLC, not at the holding company level.... Parent Company (Holding Company), LLC - taxed as a C-corp because of multi-member LLC ownership in Parent Company. Sub Company (separate location/business), LLC - 100% to 75% and 25% equity offer in specific business....what can the tax status be of this entity with a parent C-Corp? Can it be an S-Corp if the 25% granted equity is an individual?
