Entrepreneurs and founding teams of emerging technology companies select different entities for different reasons. Foley & Lardner LLP hosted a seminar that provided a practical guide to issues that arise when organizing and operating a closely-held business or venture — whether large or small, venture-backed or boot-strapped. Our speakers discussed the tax and nontax issues that should be considered when making choice-of-entity decisions, and provided examples of the significant consequences that can result from each choice.
Among the forms of organizations compared and discussed were limited liability companies (LLCs), S corporations, C corporations, and partnerships as well as various structures that leverage those forms — including single-member LLC, manager-managed LLC, and member-managed LLC — and choice of jurisdiction of the organization.
The program focused on entrepreneurs and executives who are seeking to start a business, who are involved in the organization, operation, and life-cycle decisions of businesses, and who are interested in the up-to-date trends for emerging businesses.
Highlights of the discussions included:
- Vicarious liability of owners and managers: recent developments
- Compensation issues: using interests in the business as compensation
- Methods of resolving disputes among the founders
- Federal and state taxation of the organization and owners
- Transfers of interests, and restrictions on transfer
- Venture capitalist likes and dislikes
These and other issues were addressed in an informal, interactive panel session led by Thomas Rosenbloom of Foley’s Private Equity & Venture Capital and Transactional & Securities Practices, and Kenneth Appleby of Foley’s Tax & Individual Planning and Tax & Employee Benefits Practices.
“Starting an Emerging Technology Company: Solving the Puzzle of C Corp, S Corp, or LLC” is part of Foley’s 2007 Boston Executive Briefings Series.