Business Structure Planning in 2008


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For years, we’ve had the same basic business structures and I could recite the answer to any business structure question in my sleep:

Bad Structure: Sole Proprietorship

Really Bad Structure: General Partnership

Good Structures: Limited Partnership, S Corporation, C Corporation (and then the Limited Liability Company was added)

The LLC added the first wrinkle. It could elect how it wanted to be taxed. And then the LLC asset protection laws were shored up and suddenly the LLC was the answer to everything. We started then talking about:

Good Structures: LLC – default, LLC-S (electing S Corp), LLC-C (electing C Corp)

Then Freddie Mac changed lending laws and we started talking about:

Good Structure: Trust Sandwich(tm) – for Real estate Holding, LLC-C, LLC-S

But, just in case you were keeping track, the bad structure is still the Sole Proprietorship. And the really bad structure is still the General Partnership.



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