Despite the prevalence of LLCs, S Corps remain a preferred choice of entity for many family-controlled and other closely-held businesses. They retain certain tax advantages over other pass-through entities and their corporate structure makes them familiar to investors, their legal counselors, and lenders.
Still, S Corps are "fragile" entities in the sense that the tradeoff for their tax and other benefits is that they must adhere to a several capital structure restrictions, which limit their flexibility. Drafting S Corp stockholders' agreements is a careful balance of maximizing tax benefits, preventing the loss of the preferred tax status through inadvertently disqualifying corporate actions, and maximizing organizational flexibility in other areas.
This program provides a real world guide to business planning with S Corps and drafting their underlying stockholder agreements.
Part 2 topics include:
- Understanding tax benefits (and traps) of S Corps
- Distribution planning in S Corps – tax advantages/disadvantages of withdrawing money as salary or distributions
- Incentive compensation issues, including fringe benefits and restrictions on deductibility
- Planning for the merger or sale of an S Corp into another S Corp, LLC or C Corp
Friday, October 22, 2021
- Frank Ciatto, Venable LLP, Washington, D.C.
- James DePaoli, Venable LLP, Washington, D.C.
December 17, 2020
North Carolina: 1.00 MCLE Hour
See pricing below.