Saturday, October 31, 2015
In what appears to be the first ruling of this nature, the Internal Revenue Service recently issued a private letter ruling to the effect that a limited liability company may adopt an employee stock ownership plan. Doing so requires, however, that the LLC elect, for federal tax purposes, to be classified as a corporation. As such, within the limits of this ruling (and technically it may be not be relied upon by anybody other than the party to whom it was addressed), it remains that a ESOP may not be adopted by an LLC that is taxed either as a disregarded entity or as a partnership.
PLR 201538021 (September 18, 2015).