Tax Considerations in Choice of Entity Decision

Business Entities, Vol. 5, No. 4, November/December 2003

Posted: 21 Jan 2004

See all articles by Mary A. McNulty

Mary A. McNulty

Thompson & Knight LLP

Michelle M. Kwon

University of Tennessee College of Law

Abstract

A business may choose to operate as a C corporation, an S corporation, a limited liability company, a limited partnership, or a general partnership. In addition, an LLC may choose to be taxed as a corporation or as a partnership for federal tax purposes and under the laws of some states. A C corporation, an LLC, and an S corporation provide all of their owners with limited liability for state law purposes. A limited partnership also provides all of its owners, except for the general partner, with limited liability. Therefore, the choice between the different types of entities often comes down to tax considerations.

This article discusses the tax considerations in the choice of entity decision by comparing C corporations, S corporations, LLCs taxed as partnerships, limited partnerships, and general partnerships during their formation, operation, and wind-up.

Suggested Citation

McNulty, Mary A. and Kwon, Michelle M., Tax Considerations in Choice of Entity Decision. Business Entities, Vol. 5, No. 4, November/December 2003. Available at SSRN: https://ssrn.com/abstract=491283

Mary A. McNulty (Contact Author)

Thompson & Knight LLP ( email )

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Suite 1500
Dallas, TX 75201
United States
(214) 969-1187 (Phone)
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HOME PAGE: http://www.tklaw.com

Michelle M. Kwon

University of Tennessee College of Law ( email )

1505 West Cumberland Avenue
Knoxville, TN 37996
United States

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