The “C” Word in business: Vital Issues To Consider With C-Corporations

TAXESThe article linked below contains some simple and important issues to consider regarding the taxation of C-corps. As an asset protection attorney I’ve never been a fan of them because they are weak , if not defective from a creditor perspective as the shares can actually be taken from you as an asset and handed to a creditor in the worst cases, unlike an LLC as one alternative. 

We’ve even seen estate planners use them as the General Partner of a Limited Partnership. A disaterous result when combined with the scenario above that would actually put a creditor in control of the entity you might be using for defensive purposes and to which they might not otherwise have had any access.

When ever I talk to the owner of a C-Corp. the question I ask is typically, “Why do you have a C-corp. ?” and I an continually surprised at the very small number of people who can actually articulate a reason other than that was what their CPA or attorney suggested and always does. I’ll say that’s not good enough and you and your counsel should be able to articulate a reason and that they should provide you with a comparison like the one at the end of the article linked below.

Look Before You Leap from an S to a C Corporation

http://www.accountingtoday.com/news/Look-Before-You-Leap-Corporation-66407-1.html?ET=webcpa:e6974:134343a:&st=email

There are absolutely times when the C-Crop. is the best choice as in cases where they are established to give the owner of a closely held and profitable business access to certain kinds of tax personal deferral planning. Unfortunately that’s often not why it happened. As always, this is not tax or legal advice specific to you. Get expert personalized help when examining these issues.

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