Entity Selection and Considerations for Conversion: Advantages and Disadvantages

Formation and Elections, Start-Up and Organization Costs, Tax Issues

Note: CPE credit is not offered on this program

A live 90-minute CLE video webinar with interactive Q&A


Tuesday, September 28, 2021 (in 3 days)

1:00pm-2:30pm EDT, 10:00am-11:30am PDT

or call 1-800-926-7926

This CLE course will advise corporate counsel on the more complex issues when addressing entity selection in starting up a new business in 2021. The panel will discuss a crucial first decision in choosing the correct form of entity to accomplish the company's goals including the tax consequences of the sale or liquidation of a particular type of entity and when to consider converting one form of entity to another to best achieve these goals.

Description

Business counsel need to evaluate a business’ entity structure when advising their clients both at the time of formation and initial operation and when considering a transaction, including bringing in outside investors, acquiring a new business, selling a business or when preparing for other strategic transactions. For counsel, these considerations include evaluating the legal liability of owners, tax obligations, growth potential, and compliance requirements that affect the business on an ongoing basis. As the business evolves and grows, the analysis must be updated, and the original entity type may no longer best suit the company and its investors.

In making a recommendation as to the best choice of entity, counsel should inquire about the client's short and long-term goals. A major consideration to explore is how the entity type affects the tax consequences to the business and its ownership at different points in its life cycle. Counsel should also consider and discuss with its client, the impact of entity selection on start-up costs and organizational structure.

Business owners operating as a sole proprietor, general partnership, or LLC (or variations of these entity choices such as a limited partnership or a series LLC) need to understand that their original choice of entity structure may no longer fit where their business is or wants to be. Entrepreneurs may want to consider changing their business structure as they add employees, bring on a new partner or co-owner, seek funding from investors, or plan to sell the business or retire. The process to switch from one business entity type to another may vary by business structure and the laws of the state(s) where the business operates.

Listen as our expert panel discusses how to make sophisticated decisions regarding entity choice and what factors such as ownership, management, and taxes can affect that choice. The panel will address the decisions that go into choosing an entity and when a conversion to another type of entity may be needed to better achieve the needs of the business and its owners.

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Outline

  1. Types of entities
    1. Sole proprietorship
    2. Partnerships
      1. General partnership
      2. Limited partnerships
    3. LLCs
      1. Series LLCs
    4. Corporations
      1. C corp vs. S corp
  2. Formation
  3. Start-up costs and organization
  4. Management
  5. Tax consequences
  6. Conversion
    1. Circumstances that create need to convert
    2. How to determine what to convert to

Benefits

The panel will review these and other relevant topics:

  • How does ownership and management structure impact entity choice?
  • What tax consequences should be considered when choosing an entity?
  • How are start-up costs related to choice of entity at the time of formation?
  • What factors should be considered when deciding to change from one form of entity to another?

Faculty

Brighton, Robert
Robert C. Brighton, Jr.

Shareholder
Becker & Poliakoff

Mr. Brighton represents U.S. and international issuers and investors, as well as underwriters and placement agents...  |  Read More

O'Connor, Gerard
Gerard (Jerry) O'Connor

Founder
O'Connor Law Office

Mr. O'Connor has built his practice on the representation of technology entrepreneurs for over 20 years, practicing...  |  Read More

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You may pre-order a recording to listen at your convenience. Recordings are available 48 hours after the webinar. Strafford will process CLE credit for one person on each recording. All formats include course handouts.

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