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Law Educator, Esq.
Law Educator, Esq., Lawyer
Category: Consumer Protection Law
Satisfied Customers: 116153
Experience:  Attorney experienced in commercial litigation.
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Can a Corporation or multi member LLC that is owned by 2

Customer Question

Can a Corporation or multi member LLC that is owned by 2 licensed PA physicians purchase stock in an S Corporation which provides home health care or does the stock have to be purchased by the individual physicians?
Submitted: 10 months ago.
Category: Consumer Protection Law
Expert:  Law Educator, Esq. replied 10 months ago.
Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.
An LLC is a disregarded entity according to the IRS, so this means that any stock owned in an S corporation would have to be owned by the individual members. Under S-corp rules only a natural person can own shares or own the S-corp, so a LLC, Partnership or C-Corporation cannot own shares in or own an S-corp, the individual members of the LLC, Partnership or Corporation would have to own the shares in the S-corporation under IRS rules.
Customer: replied 10 months ago.
As the Corporation provides medical services, if the physicians form a C Corporation or Partnership, is the C Corporation or Partnership able to purchase the stock of the S Corporation od does that stock only be purchased by licensed individual physicians?
Expert:  Law Educator, Esq. replied 10 months ago.

Thank you for your reply.

According to IRS rules only a real person (not a corporate person or entity) can own share in or own a S-corp, so it would need to be done by the individuals qualified to own stock in such a company.

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