Partnerships and limited liability companies are a very tax favorable business entity to conduct a family business or new enterprise. However, depending on the type of asset distributed, the partner who made the initial contribution and who is receiving the distributed asset can have some surprising results as discussed below. Also, family limited partnerships (FLPs) […]
The American Taxpayer Relief Act of 2012 (“ATRA”) has given us a permanent set of estate, gift, and GST tax rules for the first time in more than a decade. ATRA provides that a couple can transfer up to $10.5 million without having to worry about their estate paying any estate taxes on the death […]
The California Revised Uniform Limited Liability Company Act (RULLCA) is to come into effect on January 1, 2014, RULLCA revises the rules for formation and operation of Limited Liability Companies (LLCs) in the state of California. Every person who is either a manager or member of a California or foreign LLC (non-California LLC registered in […]
Over years, I have had the experience of converting corporations (either S Corps or Corps) to a limited liability company (LLC). The reasons are to achieve better asset protection from outside creditors and have less ongoing documentation (avoiding corporate minutes) but not to be considered to have liquidated for income tax purposes. I have also […]
I have been asked on numerous occasions to draft either a Limited Partnership (“LP”) or Limited Liability Company (“LLC”) agreement for many different types of business arrangements. One of the first discussion items deals with the economics of the specific transaction that the parties are entering into. What the parties describe as being simple to […]
People often ask me, what are some of the typical business owner’s concerns that I discuss with them regarding their business? In an article by Martin S. Finn, CPA, who mentioned the top ten businesses and estate planning mistakes, I was reminded of the three areas that I typically spend most of my time discussing […]
Many entrepreneurs intend to pass the family business to future generations. Unfortunately, most family businesses fail to survive into the third generation. Jeff Scroggins, a nationally known authority recent wrote an article about business succession planning. When considering the passage of a family business, there are seven important realities that need to be understood. I […]
Family businesses statistically have only a 20% chance of being successfully transferred on to the next family generation. As I have mentioned before in other articles, the death tax owed on the death of the owner of the business is not the major factor for the loss of the business from one generation. To the […]