Business Formation & Entity Planning

 

C-Corporations

C-Corporations are taxable entities.  The corporation is taxed on its income as opposed to other types of entities in which all income passes through to the owners.  If there is no plan to distribute all profits of the business to its shareholders, then creating a C-Corporation may be beneficial. 

One of the big disadvantages of a C-Corporation is that distributions of profits to its shareholders are subject to a double taxation.  In short, the corporation is taxed once on its income, and the shareholders are taxed on any distribution of profits.  

S-Corporations

S-Corporations have most of the same benefits of C-Corporations.  The only main difference is that with an S-Corporation all profits of the company pass through to the shareholders.  The shareholders would then account for the income on their personal tax return.  S-Corporations have the ability to provide some tax savings as a result of the fact that profits from an S-Corporation are not subject to self-employment tax.   

Limited Liability Company (LLC)

LLCs have become the most flexible and preferable entity for most operating businesses. They combine tax planning flexibility with administrative simplicity, legitimate asset protection, and a built-in plan for succession of interest after the business owner retires or dies.

LLCs provide a powerful tool for estate planning, too. Families who may not operate ongoing businesses can still benefit from the protection and flexibility that LLCs provide, by creating a proven and reliable structure to manage and distribute family property to children or future generations.  Illinois LLCs may not be the appropriate approach depending on if the LLC is owned by a single member.  There are other jurisdictions in which a single member LLC maintains its protections.  

Click on the following link to download the form:

Business Entity Form

We represent clients in the formation of their entities. We also represent them in lease negotiations, purchase and sale of commercial real estate, acquisitions, mergers and more.  Let us help you with your business.

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