A California LLC taxed as an S-Corp conducts two separate business activities. The owners want to separate these into separate entities. No change of ownership.
What are the steps? Does something need to be filed with CA Secretary of State?
I am wondering if this is structured like an F reorganization. Existing LLC creates a sub LLC. Transfers one of the businesses into the sub. Then, distributes the ownership of the sub LLC to the owners of the LLC.
It's that last step that has me concerned. We (me and the atty) need to make sure this distribution of "corporate" assets is not taxable.
I know this is doable in a corporate setting. You file corporate reorganization paperwork with the SOS. But, according to the SOS, this entity is an LLC.