Q: The S Corporation comes with the burden of complying with the 2% Shareholder Rules, does the C Corporation have the same issue?
A: No, the C Corporation shareholders do not have the same issue that the S Corporation holds. This is one issue that has to be taken into consideration while deciding to go with an S Corporation or a C Corporation.
Q: Does a single member LLC benefit from the same level of protection from liability as a multiple member LLC?
A: This is a state level issue, but generally, no. The single member LLC does not have the benefit of having a partner in the business. Therefore, when liability of the sole partner arises, creditors can easily attack and carry assets of the LLC. This is due to the presence of what is known as charging orders and the specific effect they have on LLCs.
Q: How many states now have the Series LLC?
A: There are now 14 states that have the Series LLC and they are becoming more common in this country. The benefit they have is that assets within them can be divided up into “series” and each “series” benefits from an added layer of protection from creditors.
By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors