The Adviser's Guide to S Corps, C Corps, Partnerships, LLCs and Sole Proprietorships: Making the Right Choice

Choosing the most favorable form for a new business entity can be a difficult task, and making the wrong choice can have devastating tax and legal ramifications. This Guide reviews and analyzes each of the available entity choices and through the use of numerous case studies and examples explains:

• C Corporations
• S Corporations
• Professional Service Corporations
• General Partnerships
• Limited Partnerships
• Limited Liability Companies (LLCs), and
• Limited Liability Partnerships (LLPs)

In recent years the question of which entity form a business should adopt has become more complex. Historically, businesses desiring better retirement plans for their owner-employees were forced into the corporate form, while those preferring a single level of tax remained in a traditional proprietorship or partnership. More recently, the rules affecting retirement plans for noncorporate entities have expanded to allow more flexibility. LLCs and LLPs allow for even more options.

Making the right choice of entity involves analyzing a number of factors, including the owner's ultimate goal for the business. Since you can’t take it with you, the question becomes how will the owner ultimately dispose of the business? This book addresses these questions, as well as the following topics:

• At-Risk Rules and Passive Loss Rules
• Basis
• Creditor-Protection Strategies
• Dividends, Sales and Reorganizations
• Elections, Contributions, Transfers and Termination
• Estate Planning and Succession Planning Issues
• Family Corporations
• Liquidations, Restructurings and Asset Transfer
• Real Property
• Retirement Plans and Fringe Benefits
• Salary and Self-Employment Tax Issues
• Valuation Discounts

These issues each have distinct implications in the choice, formation and operation of the entity. The Guide will help you analyze these issues, so that you can help your clients make the right choice!