Can an LLC own a C-Corp?

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Can an LLC own a C-Corp?

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katt33

posts: 484

Feb 12, 2008 3:24 PM ET Quote Report Abuse

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I am curious as to whether an LLC an own a C-corporation. Does anyone know the answer to this?

abergmanesq

posts: 7

Apr 15, 2009 1:52 PM ET Quote Report Abuse

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Yes - an LLC can own a "C" Corporation. Only "S" Corporations have restrictions as to who can be a shareholder. Hope this helps.

Adam

afs24

posts: 3

May 22, 2009 9:25 PM ET Quote Report Abuse

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Do you have a little more information on this? I have an LLC that I plan to use to acquire a C Corp. Is it as simple as my LLC will be named in the escrow insturction aquiring the C corp? We want the business we are buying to function as an LLC? Not sure the details around ths but I`m actively searching. thanks

baloga

posts: 67

Jul 10, 2009 11:17 AM ET Quote Report Abuse

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AFS24 - is there something special or unique as to why you need to acquire the C corp.? Can you accomplish the same thing by having the LLC purchase the assets of the C Corp? By purchasing the stock of the C corp. you are also acquiring the ongoing liabilities that exist at the date of closing (both known and unknown).

Ed Baloga, CPA / MBA
Principal CFO
Baloga Associates
ebaloga@baloga-associates.com
www.twitter.com/edbaloga

ecodisplayware

posts: 3

Jul 13, 2009 9:31 PM ET Quote Report Abuse

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I agree. Unless you have a real reason to maintain the C Corp structure, simply acquire the assets of the C Corp. I have often thought about this. The reason you want to maintain a C Corp is if the stock and investment pool is just for the C Corp and does not provide any rights to the LLC (the parent). The question is if VC`s will like that. An LLC is a parent and the primary shareholder in a C Corp but all the accounting and operations are completely independant of the parent.

Doesn`t Berkshire Hathaway operate this way? Although, I am not sure what the structure of Berkshire Hathaway is? Is it an LLC?

Neil

infinique1

posts: 178

May 25, 2010 3:37 PM ET Quote Report Abuse

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It's better to get your attorney for your state to go through the legal implications to be on the safe side.

myusacorporation

posts: 23

Nov 16, 2010 5:55 PM ET Quote Report Abuse

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I agree that in some cases if you are buying a business its a good idea to purchase the assets and place them in a new entity. However, in some cases the old entity itself might be valuable, for example if it has history (including credit history). It might have established lines of credit, used by the business, as an example, or more technical things like SSL certificates, BBB records etc.

But of course it could also carry negative history. Its a good idea to do proper due diligence both the the business and for the legal entity that holds that business.

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