C Corp with SLLC

I have a C Corporation client with a single member LLC operating as a subsidiary. We are working to change their ERP systems and we are considering whether we can consolidate the balance sheets of the companies and just run separate p&l's. The company will likely keep separate inventory and a/r records.

For tax it is consolidated, so it doesn't really matter. Anyone think this will create a legal issue? I am also facing this questions for a client with multiple QSUB's owned by a single S Corporation.

In my opinion/experience, to maintain an entity's legal protections, it needs to have a separate set of books and records. If that can be accomplished via what you're proposing, then there shouldn't be an issue.

What if the LLC/sub is to be sold? A buyer would want to see its Balance Sheet.

We maintain separate financial statements for each operating entity ( i.e. LLC & C Corp). Since the company will likely keep separate inventory and A/R, you have to have separate balance sheet.

As for consolidated report, you can either use Excel or create a new entity "Consolidation Company" for bookkeeping on the software.