What are the benefits of an LLC over a C corporation?
With the passage of time, the C corporation becomes less and less attractive from a tax perspective for the following reasons: * Unlike in a corporation, there is no need for LLC members that transfer property to the entity to have at least 80% initial control in the LLC. * Double taxation in a C corporation exists not merely at the time of dividend distributions but, more significantly, upon liquidation (if the corporation has accumulated or current earnings and profits). * Unique to the C corporation is the existence of such penalty taxes as the alternative minimum tax (when the $5 million gross receipts test is not met), the personal holding company tax, and the accumulated earnings penalty tax (exposure to which can be reduced by documentation such as corporate minutes supporting the reasonable needs of the business to accumulate earnings in excess of $250,000; $150,000 in the case of a personal service coporation). * The mere distribution of appreciated property (i.e., asset retit
