When we began to show profits and faced double-taxation, we converted
I would love to continue the conversion fest and change the S-corp to an LLC, but tax regs won't let that happen without considerable tax consequences, or so I've been informed.
As a consolation prize, I was wondering about the following...
When one has a C-corp, some care must be taken to to comply with certain regulations related to corporations, such as the election of officers, keeping annual meeting minutes, operation agreements, etc... to not do so runs the risk of your corporation not being considered a separate entity. Ok fine for a C-corp... but if I forego that stuff while being an S-Corp will I expose myself to any serious risk? I think an S-corp can also be viewed as an admission that at least in accounting terms, the corporation and its shareholders (me and my partner) are one and the same, that's why I think that money in the company checking account gets counted on our individual tax returns, even though we may not have taken a formal distribution on it. But in terms of liability protection, do I still need to play this game of keeping minutes, etc, so as to "be one" with the company on accounting terms, but to "be separate" with the company in liability protection terms?
For you folks that read the bulletins and literature, any relief on the horizon for us dinosaur entities that didn't really have the LLC option available to them 30 yrs ago?
Thanks for any informed repsonses.