The Problem With S-Corp LLCs

Source: http://kentuckybusinessentitylaw.blogspot.com/2015/11/the-problem-with-s-corp-llcs.html

While I do not disagree with Warren Kean that an S-Corp LLC may at times be a viable format based upon particular facts, I continue to view this structure as more often than not a "solution in search of a problem."  See generally Rutledge,  S Corp LLCs – Planning Opportunity or Solution in Search of a Problem?, 15 J. Passthrough Entities 37 (July/Aug. 2012).

While is a highly-lawyered transaction the form may have a place, I see them in hugely unsophisticated deals and written by people who really do not understand what they are doing.

By way of example, I was recently sent for review an operating agreement which provides in part:Section 4.4.  Counterpart of Code to Apply in Event of Subchapter S Election by Company