Thursday, December 20, 2018, 1:00-2:00pm
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
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