Entity Classification

Virtually all U.S. and non U.S. jurisdictions provide for the legal pursuit of business activity under the mantel of a variety of alternative corporate, quasi-corporation, and non-corporate legal structures. Typical (albeit not universal) choices include:

  • • Large capitalization corporation
  • • Small capitalization corporation
  • • Limited liability company
  • • Partnership with limited liability
  • • General partnership
  • • Domestic branch of a foreign business entity
  • • Proprietorship
Selecting proper legal structures in both the U.S. and in non- U.S. jurisdictions and making proper U.S. tax classification elections for all entities (foreign and domestic) will have wide ranging implications on initial and ongoing operations. These choices can affect operating costs and complexities, the scope of legal business pursuits, capital costs, direct income taxes, tax deferral, the ability to currently deduct operating losses, and significant rights and obligations under tax treaties.



Bar Journal Checkbox