Pierce Atwood Business Counselor Q1 2013
Choice of Entity for Closely Held Businesses - The Affordable Care Act Further Complicates the Decision
By: Robert Ravenelle and Kris Eimicke
Since the rise of limited liability company laws in the late 1990s, closely held businesses typically have operated as “S” corporations or limited liability companies to obtain pass-through income tax treatment, thereby avoiding two levels of income taxation. Often (perhaps too often) the choice between the two has come down to the issue of employment taxes. The Affordable Care Act imposes new Medicare-related taxes effective this year which may further muddle the choice of entity decision. In this article, Pierce Atwood’s Rob Ravenelle and Kris Eimicke discuss these new taxes and how they impact “S” corporation shareholders and limited liability company members.
Pierce Atwood Business Counselor is a quarterly publication covering current developments and issues of interest in the business community. For more information about the topics covered in this edition of the Pierce Atwood Business Counselor, please contact the article’s author or a member of our Business Practice Group.