LLC or Corporation? 8 th Edition. Anthony Mancuso

Transcription

1 LLC or Corporation? 8 th Edition Anthony Mancuso

2 Chapter 1 Business Entity Basics... 1 Learning Objectives... 1 Introduction... 1 Why Your Choice of Entity Matters... 1 Sole Proprietorships... 2 Number of Owners... 3 Liability for Business Debts... 3 Income Tax Treatment... 3 General Partnerships... 3 Number of Partners... 4 Personal Liability for Business Debts... 4 General Partnership Income Taxation... 5 Limited Liability Companies (LLCs)... 5 Number of Owners... 6 Limited Liability... 6 Pass-Through Taxation... 6 Management... 6 Formation Requirements... 7 Corporations... 7 Number of Shareholders (Owners) and Directors... 7 Limited Liability for Shareholders... 8 C Corporation Income Taxation... 8 Corporate Management Corporate Capital and Stock Structure Employee Fringe Benefits And the Runners-Up: Limited Partnerships, S Corporations, and RLLPs Limited Partnerships S Corporations Registered Limited Liability Partnerships (RLLPs) Review Questions Review Answers Chapter 2 Personal Liability Concerns Learning Objectives Introduction How Your Choice of Business Entity Affects Personal Liability Sole Proprietorships and General Partnerships Limited Liability Entities Exceptions to the Rule of Limited Personal Liability Limited Partnerships Using Insurance to Limit Liability Review Questions Review Answers Chapter 3 Forming and Running Your Business Learning Objectives Introduction Forming and Running a Sole Proprietorship Forming a Sole Proprietorship Running a Sole Proprietorship Forming and Running a Partnership Forming a Partnership Running a Partnership Forming and Running a Limited Liability Company... 32

3 Forming an LLC Running an LLC Forming and Running a Corporation Forming a Corporation Running a Corporation Resources for Forming an LLC or Corporation State Websites Legal and Business Self-Help Books Review Questions Review Answers Chapter 4 Money Issues: Taxes, Profits, Losses, and Investments Learning Objectives Introduction Taxes Pass-Through Tax Treatment How Do You Keep Track of Your Tax Basis in a Co-Owned LLC? Corporate Tax Treatment Changing Your Tax Classification Paying Out Profits Sole Proprietorships General Partnerships LLCs Corporations Start-Up Losses Institutional and Venture Capital Planning for a Public Offering Review Questions Review Answers Chapter 5 Choosing the Right Business Entity: Real Life Stories Learning Objectives Introduction Fast Food Fusion: A Start-Up Business Chooses a Business Form Bill and Barbara Seek Investment from a Relative Soaring Duck Designs Seeks Lower Taxes and a Structured Hierarchy Silikonics Creates an Entity to Attract Outside Investors The Surf Side: From Lunch Counter to LLC to Corporate Franchise From Sole Proprietorship to Sole-Owner LLC From One-Owner to Co-Owned LLC From LLC to Corporation Review Questions Review Answers Chapter 6 Converting a Sole Proprietorship to Another Entity Learning Objectives Introduction Converting a Sole Proprietorship to a Partnership Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Self-Employment Taxes Securities Laws Procedures Converting a Sole Proprietorship to an LLC Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures ii

4 Self-Employment Taxes Securities Laws Procedures Converting a Sole Proprietorship to a Corporation Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures S Corporation Tax Election Procedures Self-Employment Taxes Securities Laws Procedures Review Questions Review Answers Chapter 7 Converting a Partnership to Another Entity Learning Objectives Introduction Converting a Partnership to a Sole Proprietorship Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Self-Employment Tax Status of Owners Securities Laws Procedures Converting a Partnership to an LLC Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Self-Employment Tax Status of Owners Securities Laws Procedures Converting a Partnership to a Corporation Reasons to Incorporate Your Partnership Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Self-Employment Tax Securities Laws Procedures Review Questions Review Answers Chapter 8 Converting an LLC to Another Entity Learning Objectives Introduction Converting an LLC to a Corporation Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Social Security Tax Securities Laws Procedures Converting an LLC to a Sole Proprietorship Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Self-Employment Tax Status of Owner Securities Laws Procedures Converting an LLC to a Partnership Legal Procedures Income Tax Consequences of Conversion Tax Filing Procedures Self-Employment Tax Status of Owners iii

5 Securities Laws Procedures Review Questions Review Answers Chapter 9 Converting, Dissolving, and Selling a Corporation Learning Objectives Introduction Converting a C Corporation to an S Corporation Financial and Tax Consequences of an S Corporation Tax Election S Corporation Election Procedures Security Law Considerations Liquidating and Dissolving a Corporation Legal Procedures for Dissolution Income Tax Consequences of Dissolution FICA Taxes Securities Laws Procedures Selling a Corporation Selling a Corporation to a Noncorporate Buyer Selling a Corporation to Another Corporation Review Questions Review Answers Chapter 10 Doing Business Out of State Learning Objectives Introduction Doing Business Out of State What Does Doing Business in Another State Mean? Are the Rules for Doing Business Out of State the Same for Corporations and LLCs? What Are the Rules for Qualifying in Another State? When Do You Have to Pay Income Tax or Collect Sales Tax in Another State? Can Your Company Be Sued in Another State? What about Business Done on the Internet? Qualifying to Do Business When Must You Qualify to Do Business in Another State? What Activities Are Not Considered Intrastate? How Do You Qualify to Do Business in Another State? What Other Obligations Do You Incur After Qualifying? What about Branch Offices in Other States? What Happens If You Fail to Qualify for Business? When Can You Use Your Trademarks in Another State? Paying and Collecting Taxes in Other States When Do You Have to Pay Income Taxes to Another State? When Do You Have to Withhold State Personal Income Taxes? When Do You Have to Withhold and Pay Other State Employment Taxes? When Do You Have to Pay Sales Tax to Another State? Lawsuits in Other States When Can Your Company Be Forced to Defend Itself in Another State? What Can Your Company Be Sued for in Another State? Can Officers, Agents, or Employees (or Parent, Subsidiary, or Successor Companies) Be Sued in Another State? Can You Contract Your Way Out of Lawsuits in Another State? Which State s Laws Apply with an Out-of-State Dispute? Should You Fight Personal Jurisdiction? Can You Sue Employees or Independent Contractors in Other States? Internet Issues When Do You Have to Pay Sales Tax for Internet Sales? Where Must You Qualify If Your Company Operates a Website? iv

6 If Your Company Operates a Website, Where Can It Be Sued? Review Questions Review Answers Appendix: State Website Information State Business Entity Filing Websites State Tax Office Websites State Securities Office Websites Glossary Index v