June 16th, 2006

Law Makes it Easier for Corporations to Become LLCs

Act 153 of 2006 provides a simple procedure for a Louisiana corporation to convert itself into a limited liability company. Before the new law, the only way a conversion could be done was through a bulky merger process. We have prepared a handy conversion kit, and you can call us for a free copy.

Corporations that are happy continuing to be taxed as corporations would convert to an LLC primarily to save Louisiana franchise taxes, which corporations pay but LLCs do not. Corporations that want to start being taxed like partnerships should be sure to talk to a tax advisor before doing a conversion, because there could be nasty tax consequences. (Thanks to Bob Nuzum of the Baker Donelson firm for alerting us to the tax implications).

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