Check the Box
The Registry is often asked whether for United States income tax purposes, a Liberian limited liability company (LLC) may elect to be treated as an entity other than a corporation (that is, as a partnership or ‘disregarded entity’) so that it can take advantage of the pass-through of business gains and losses permitted by the US Tax Code. The Liberian LLC is not designated as a per se corporation on the list attached to Regulation 301.7701-2(b), thus it is eligible to check the box, and specify non-corporation when completing Form 8832.
It has further been confirmed in IRS private letter rulings that if a foreign entity qualifies as a per se corporation, it can be converted to a new type of entity (under the laws of that same foreign country) which would then be eligible to “check the box” and change its classification for US tax purposes under 301.7701-3.
If a Liberian corporation converts to a Liberian LLC, it would no longer be a per se corporation, and thus would be eligible to elect its status for US tax purposes.
- Liberia visits CSAV in Valparaiso, Chile (December 2013)
- Corporate Newsletter – Issue 17