Entries tagged with “c-corporation”

Limited liability company or "C" corp?

Posted by Dave Broadwin on January 05, 2010
I once sat in on a meeting between a public company client and an investment banker, from whom the client wanted an underwritten offering. At one point in the conversation the CEO of my client said something like, “We intend to structure our business in accordance with the requirements of Wall Street.” Nobody twitched. But this is not going to be a post on the absurdity of taking unsound actions to appease Wall Street, it is a post about being realistic about how you cater to your financing sources. ... More

Reverse Vesting and S Corporations

Posted by Dave Broadwin on July 17, 2009
I recently ran into this interesting question: If you want to use reverse vesting and take advantage of 83(b) in an S Corporation what do you do about (1) tax distributions and (2) built up after tax profits? In the case of tax distributions, once the shares are issued, the holder will have to pay tax (to the extent that there are taxable profits) pro rata in accordance with his ownership. So, it seems logical that any distributions made to help stockholders pay this tax should also go to the holder of restricted stock on a pro rata basis. If they do not,... More

How to incorporate: "C" "S" or LLC?

Posted by Dave Broadwin on March 16, 2009
To a large extent, but not exclusively, whether to be a “C” corporation or an “S” corporation or a limited liability company (and “LLC”) is a tax issue. LLCs and “S” corporations are so-called pass-through entities. That is to say that the entity itself is not taxable; its tax attributes (profits and losses) are passed through to the owners of the entity, and they pay tax in accordance with their particular tax situation (often at the highest marginal rate for individuals – assuming they are well-to-do). (Most LLCs and “S” corporations distribute cash to enable their owners to pay these owner-level taxes.)   Distributions... More
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