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How Can an LLC Qualify for a Pass-Through Taxation?

April 26, 2017LLC pass-through qualify Taxation

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How Can an LLC Qualify for a Pass-Through Taxation?

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If an LLC wants to qualify for a Pass-Through taxation, or an S Corporation status, it must meet certain requirements. To qualify, an LLC may not have more than two of the following characteristics. 1. Limited Liability 2. Perpetual Existence 3. Free Transferability of Interest 4. Centralized Management An LLC will already have limited liability, and if the LLC is managed by manager(s), the LLC will have centralized management.