Q: I want to open an LLC in Wyoming but want to elect for a C-Corp Taxation… Also, Can you ensure the C-Corp Election is done initially itself so that no Form 8832 is needed?
Thank you to a business owner in Wyoming for that great question! A limited liability company (LLC) is one of the more versatile business structures, especially when it comes to taxation. However, creating a business entity and electing a tax status are two separate procedures, and you won’t be able to change your tax status without going through the IRS. Here’s how to create an LLC taxed as a corporation in Wyoming:
1. Form a Wyoming LLC
First things first, you’ll need to register your Wyoming LLC with the Wyoming Secretary of State. This means filing Wyoming LLC Articles of Organization ($100), which will require you to provide:
- LLC name
- Whether or not you choose to be a “close limited liability company”
- Registered agent name and address
- LLC mailing address
- LLC principal office address
- Consent to receive service of process by email
- Signature of an LLC organizer
Wyoming, like most states, does not ask for your tax status.
Is an “LLC taxed as a corporation” its own business entity?
No. In the case of an LLC taxed as a corporation, the business entity is simply an LLC.
Can I change my tax status through my Wyoming Articles of Organization?
No. This can be confusing because a business’s entity type does initially determine it’s tax status. For example, a corporation is automatically given the tax status of “corporation,” while a multi-member LLC is a “partnership” by default.
However, even though your business structure can determine your tax status, you cannot change your tax status when you form your business. Changing your tax status must be done through the IRS.
2. Get your EIN
Every business entity must have a unique identifier, known as an EIN (Federal Employer Identification Number). To apply for a new EIN, you’ll use IRS Form SS-4.
Can I choose “C-corp” status for my LLC when applying for my EIN?
Unfortunately not. A business entity must complete Form SS-4 with its default filing status, which depends on the number of LLC members you have:
- Single-member LLC: “disregarded entity”
- Multi-member LLC: “partnership”
3. File Form 8832 with the IRS
According to the Instructions for Form SS-4, the only way for an LLC to be taxed as a corporation is to file Form 8832 “and elect to be classified as an association taxable as a corporation.”
Does filing taxes as a corporation make my LLC an S-corp?
Not quite. S-corp and C-corp are different tax designations, and an LLC can choose either one. If you’re planning to be an LLC with S-corp tax status, you’ll first need to make sure your LLC meets certain criteria:
- Be a Domestic Entity
- Have Allowable Shareholders/Members
- Have No More Than 100 Shareholders/Members
- Have Only One Class of Stock
- Not Be an Ineligible Entity (such as DISCs or certain banking or insurance companies)
Then, you’ll need to submit Form 2553 to the IRS.
To learn more about different tax structures for LLCs, see: How to File LLC Taxes