Choosing the Business Entity: Help Clients Make the Right Decisions

Author: Steven G. Siegel

Assisting your clients, during the formation of their business, as they choose the correct entity form is critical due to the decision’s profound implications — tax and otherwise. Whether the entity is as simple as a sole proprietorship or as complicated as a multi-owner corporation, partnership, or LLC, when clients come to you on this key issue, you need to be prepared to help them make the right decision.

This two-hour course presented by noted tax adviser, author, and educator Steven G. Siegel, J.D., LL.M, will explain the rules, requirements, issues, and opportunities in selecting the best entity type in which to operate a business. Since each business entity option has advantages and disadvantages, including liability, federal and state taxes, required formalities, flexibility, cost of forming and operating the business, and more, there is much to take into account when guiding your clients down a path to success and sustainability with their business. Mr. Siegel will provide helpful tips and practical suggestions, so you can advise your clients with confidence on matters regarding choice of entity and the resulting tax and non-tax implications.

Publication Date: April 2019

Designed For
Tax partners, managers, and staff, CPAs, enrolled agents, tax return preparers, tax attorneys, and other professionals that advise businesses on tax and financial matters

Topics Covered

• Types of Entities to be Considered
• Ownership Issues
• Liability Issues
• Management and Control Issues
• Issues of Simplicity, Formality and Cost
• Formation of the Entity
• Operation of the Entity - Tax Considerations
• Disposition of the Business Interest
• Changing from One Business Entity to Another

Learning Objectives

• Describe the essential tax and non-tax rules, issues and considerations related to business entity choice
• Explain the similarities and differences in the business, legal and tax rules related to each of the business entity forms available
• Identify planning opportunities using business entity choice
• Recognize the personal service corporation percentage subject to a flat income tax rate
• Identify which business entity is required to use a calendar year for reporting
• Describe which form sole proprietors must report the income or loss from operations on
• Differentiate IRC sections and how they apply
• Recognize how many shareholders an S corporation is limited to
• Identity how many year(s) an S corporation must generally wait after termination or revocation of S status before getting reinstated
• Identify disadvantages of various types of business entities
• Recognize which form of entity is subject to double taxation
• Identify which taxes are applicable to a C corporation and what was repealed by the Tax Cuts and Jobs Act
• Describe requirements specific to a S corporation

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None