•
Same pass-through features of an S corporation which avoids double
taxation of profits.
• Flexibility of a partnership without the restrictions of an S
corporation.
• In comparison to a limited partnership, the Limited Liability Company (LLC)
offers limited
liability protection for all members, whereas the general partner in a
limited partnership has unlimited liability. Also, if any limited partner
in a limited partnership participates in management, the limited partner
is exposed to personal liability, whereas a Limited Liability Company (LLC)
member who participates
in management is not exposed.
• Contribution of appreciated property to an S corporation is a tax-free
event if the contributing shareholders control 80% or more of the stock
after the contribution. A contribution of appreciated property to an Limited Liability Company (LLC)
as a partnership is tax free regardless as to how much control the
contributing partner has.
• Liquidation of an S corporation interest is a taxable event and is
treated as if the corporation sold the liquidated assets at their fair
market value to the shareholder. Liquidation of a Limited Liability Company (LLC)
as a partnership is
generally a tax-free event. |
