Law 3102 entity comparisons limited liability slides from Matt Edwards

Law 3102 entity comparisons limited liability slides from Matt Edwards

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12/09/11 1 Limited Liability Entities Limited Liability Entities in New York in New York Professor Matthew A. Edwards This is an informal presentation. Do not cite, quote, reproduce or distribute the material contained in this or any Powerpoint presentations in this course.
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12/09/11 2 Types of Limited Liability Entities in Types of Limited Liability Entities in New York New York LLC: Limited Liability Company PLLC: Professional Service Limited Liability Company LLP: Limited Liability Partnership (also called an “RLLP”) “C” Corps. “S” Corps.
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12/09/11 3 Review: Major Factors to Consider Review: Major Factors to Consider in Choosing a Business Form in Choosing a Business Form The following slides will discuss some of the factors that business people consider as they choose the proper business form for their ventures.
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12/09/11 4 Ease and Expense of Formation Ease and Expense of Formation The costs and burdens of forming the enterprise must be weighed against the benefits of utilizing more complex business forms. This includes fees to the state as well as the expense of experts such as attorneys and accountants.
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12/09/11 5 Personal Liability of Owners Personal Liability of Owners Owners and investors want to protect their personal assets from the business’s tort and contract creditors.
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12/09/11 6 Structure of Management and Structure of Management and Control Control Given the desires of the “owners” does the selected business form offer the needed flexibility and the option to set up the most suitable management structure?
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12/09/11 7 Taxation Taxation The owner wants the most favorable tax treatment possible for both herself and the business. This is a complex issue that must be discussed with a tax professional. Major issues, however, are noted on the next slide.
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12/09/11 8 Taxation (cont’d) Taxation (cont’d) Some of the tax considerations include: (1) avoiding multiple layers of taxation; (2) trying to convert ordinary income into capital gains, if capital gains are taxed at lower rates; (3) where possible, offsetting business losses against other sources of income; and (4) determining how contributions of property to the entity will be treated.
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12/09/11 9 Income Income How (if at all) do the owners plan to take income out of the business? (This is related to the Taxation section above.)
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12/09/11 10 Transferability of Ownership Transferability of Ownership Interests Interests How easy will it be to transfer ownership interests in the business?
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12/09/11 11 Continuity Continuity Some business forms have greater continuity of life than other business forms.
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12 Ability to Raise Capital Ability to Raise Capital Entrepreneurs want to create a business form that will be attractive to outside investors and lenders. E.g., What if an IPO is anticipated?
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Law 3102 entity comparisons limited liability slides from Matt Edwards

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