PARTNERSHIP, LLC & CORPORATIONS
We provide advice with respect to all issues that arise during the life-cycle of business and investment ventures in Partnerships, Limited Liability Companies (“LLC”), S Corporations and C Corporations. Our lawyers draft operating agreements to fit the specific needs of diverse participants, such as solo business owner, small family businesses, multi-investors, tax-exempt organizations, and high-net-worth individuals.
We advise clients on the use of partnerships, LLCs, and both C and S corporations in the context of corporate restructurings in order to provide new capital to an ongoing venture or to avoid undesirable consolidations or multiple levels of tax.
In addition, we regularly provide advice regarding the use of entities disregarded for tax purposes to minimize cross-border taxation, isolate liabilities, and maximize the transfer of wealth across generations.
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LLC vs. Corporation: What's the Difference?
Advantages of an LLC
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No limit on the number of owners
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Profit and loss are passed through the owner's' individual tax returns
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No annual meeting or minute book requirements.
Advantages of a Corporation
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May issue shares of stock to attract investors
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Corporate income splitting may help lower overall tax liability
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Certain tax advantages. Enjoy tax-deductible business expenses
Disadvantages of a Corporation
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C corp tax structure requires double taxation of corporate profits (S corp's does not). No deduction of corporate losses. Unlike an S Corporation, shareholders can't deduct losses on their personal tax returns.
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Must hold annual meetings and record minutes
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S corporations have restrictions on the number of owners
Disadvantages of an LLC
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Cannot engage in corporate income splitting to lower tax liability
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Tax recognition on appreciated assets
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Self-employment tax. Earnings can be subject to this kind of taxation.