- Jurisdiction
- California
I am drafting an operating agreement for an LLC that will elect to be taxed as a C corporation. The C corp tax election is avoid complications from with holdings for certain investors that are not US taxpayers.
My question is about the operating agreement: do I need to include the complex tax provisions that are commonly found in "long form" operating agreements?
I believe the answer is no. The tax provisions do not have to be included because those provisions are to ensure compliance with IRS regulations related to partnership taxation, primarily IRC section 704. Because the LLC will chose C corporation taxation, the partnership taxation issues should not be relevant.
Can any one confirm or comment?
Are there other tax issues that should be included in the operating agreement if the LLC chooses C corp taxation?
My question is about the operating agreement: do I need to include the complex tax provisions that are commonly found in "long form" operating agreements?
I believe the answer is no. The tax provisions do not have to be included because those provisions are to ensure compliance with IRS regulations related to partnership taxation, primarily IRC section 704. Because the LLC will chose C corporation taxation, the partnership taxation issues should not be relevant.
Can any one confirm or comment?
Are there other tax issues that should be included in the operating agreement if the LLC chooses C corp taxation?
