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Discussion:PLLC vs S-Corp

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Discussion Forum Index --> Tax Questions --> PLLC vs S-Corp


AdaHu (talk|edits) said:

13 January 2006
Hello there,

I currently have a California corporate client(only 1 stockholder/owner) that is a personal service corporation that files a Federal Form 1120/CA Form 100. I have been doing a little research and am thinking it may be more advantageous for him to file as either a S-corp or PLLC. CA currently doesn't recognize the PLLC entity, so I was leaning towards S-corp more, but then maintaining records for a PLLC would be much simpler, I would think.

Can anyone tell me the pros and cons of forming a PLLC vs. a S-Corp as it would relate to my situation?

Thank you!

Riley2 (talk|edits) said:

13 January 2006
In California, professionals who are required to have a license of any kind are not allowed to practice under an LLC.

PGattoCPA (talk|edits) said:

13 January 2006
I think you answered your own question and Riley2 confirmed it - i.e., a PLLC is not allowed in CA so it off the table as an option in your situation. Therefore, the choices are to stay a subchapter C corporation or convert to a subchapter S corporation.

Riley2 (talk|edits) said:

14 January 2006
In California, certain professionals are allowed to form LLP's. In which profession does the client practice?

PGattoCPA (talk|edits) said:

14 January 2006
Good point, I forgot about the LLP. (A "duh!" moment.)

LLPs may only be formed in CA by licensed persons for the practices of public accountancy, law or architecture.

Msmith7305 (talk|edits) said:

14 January 2006
Don't neglect to research the issues of the built-in gains tax.

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