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I have a question, rather two parts to this question please

Customer Question
see below. My current partner (soon...
I have a question, rather two parts to this question please see below.
My current partner (soon to be ex partner) opened Global Foundation LLC before I knew him. I was added to the company later on and since then he has done nothing in the company and really had no interest but he has been on the company. As of late he has agreed to get off the company since he has not been active in it in years. I called Nevada state they said it is not a problem for me to reinstate the company with only myself on it (it is past due for this year). My partner mentioned that he was concerned that it would be an issue if I took him off and I left myself on because he started the company and it is tied to his social security number. So my question is, can I take him off the company and leave myself on without the company being tied to his social?
Secondly my CPA told me it is best if I switch the LLC to a S corp. This is her response “ He is withdrawing from the partnership and you are not. As you will read on the forms attached, once the partnership ended the company became a disregarded entity. This mean all the income and expenses would be reported to the IRS on a Schedule C on your personal income tax return. We are filing the paperwork so that Global Foundation LLC can be taxed as an S corporation. Filing as an S corporation is the same as filing as a partnership. All the profit/or loss will be taxed on your personal income tax return. If there are losses there is no tax to pay, the losses will reduce your income to lower the taxes due. You will not see any change. We just need to file the paperwork. If you would like, you can sign the forms, scan and email them back to me and I will send them in on your behalf.”
I am simply looking for confirmation from you ,in regards ***** ***** suggestions, that she is on the right track. Thanks
Submitted: 1 year ago.Category: Business Law
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6/6/2016
Business Lawyer: Law Educator, Esq., Attorney replied 1 year ago
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 121,086
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only.

Even if he has his SS on the LLC, you can change the ownership on the LLC by filing the forms to reinstate together with an amended annual report which would remove him from ownership in the company completely.

Your CPA is part right. The LLC can be taxed onto your personal taxes, which you do not want. However, the LLC can elect to be taxed as an S corp and that is sufficient, you do not have to change the whole LLC to an S corp you can be an LLC taxed like a corporation. However, the statement they made about the S corp can also hold true for an LLC not taxed as an S corp, so really it makes no difference either way when it comes to the taxes flowing through to your personal taxes whether you are an LLC taxed as a partnership or an S corp taxed in the same way.

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