Your Client Has Operated a Sole Proprietorship for Several Years

question 79

Essay

Your client has operated a sole proprietorship for several years, and is now interested in raising capital for expansion. He is considering forming either a C corporation or an LLC.
a. Describe the treatment of an LLC and discuss any advantages the LLC offers over the C corporation.
b. Assume instead the client has previously operated as a C corporation. Describe the tax consequences of converting to an LLC.

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Definitions:

Holy City

A city regarded as especially sacred by the adherents of a particular religion.

Theological Separation

The division or separation within religious groups based on theological beliefs and doctrinal differences.

Routinization

The process of making an activity or task regular or habitual, often by establishing a standardized procedure or routine.

Weber

Refers to Max Weber, a German sociologist, philosopher, and political economist whose ideas profoundly influenced social theory and social research.