S Corp can help with self-employment tax and LLC can be quite easy to maintain.
Each business is unique, and it is important to discuss the tax implications and business survival.
A couple of years ago, two brothers formed a partnership to purchase a Macdonald Franchise. However, they concealed this partnership from Mac-Donald and signed the franchise agreement under one of the brother’s name. New Macdonald franchisee died few months later. This caused major turmoil in the family.
The surviving brother claimed the share in the estate, but his request was rejected. This was mainly due to the fact that partnership was canceled from Macdonald, and their franchise agreement was based upon a misrepresentation by the brothers.
Moreover, this gave a reason to Macdonald's to terminate the franchise agreement. Talk about the loss of the brother and loss of assets like Macdonald Franchise.
We can all learn from this example and set up our business structure properly. Give Sanjiv Gupta CPA firm a call if you would like to discuss your business structure.