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Contributions to nonconnected PACs from limited liability companies (LLCs)

For purposes of contribution limitations and prohibitions, a limited liability company (LLC) is treated as either a corporation or a partnership.

An LLC is considered a corporation if:

An LLC is considered a partnership if:

  • It has chosen to file, under IRS rules, as a partnership; or
  • It has made no choice, under IRS rules, as to whether it is a corporation or partnership.

If an LLC is considered a corporation, it is prohibited from making contributions to political committees or to candidates, although it is permitted to establish a separate segregated fund. If it is considered a partnership, it is subject to the contribution limits for partnerships.

Single member LLC

If a single member LLC does not elect corporate tax treatment, it may make contributions; the contributions will be attributed to the single member, not the LLC.

Notifying recipient committee

An LLC must, at the time it makes a contribution, notify the recipient committee:

  • That it is eligible to make the contribution; and
  • How the contribution should be attributed among members.

This requirement will prevent the recipient committee from inadvertently accepting an illegal contribution.

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