Posted by JOHN K HASLACH, CPA MST on May 18, 2004 at 14:58:21:
Be careful of who you have as owners of your S Corp. The ownership is very limited. Have an ineligble stockholder and you blow your S election and you have a C corp. Could be a big problem having appreciated property in a C corp.
Using a Trust to start a Business - Posted by RJ
Posted by RJ on May 17, 2004 at 21:42:09:
I was wanting to start a LP and make a trust the general partner for ownership privacy. Is this possible and a good/bad idea? Also if I wanted to use an entity as beneficiary which would be the better choice
Re: Using a Trust to start a Business - Posted by Garrett Sutton
Posted by Garrett Sutton on May 18, 2004 at 09:47:57:
I am not a fan of using a trust to be a GP of an LP. First of all, not all trusts provide asset protection. To do so you’d need to set up an entity as the beneficiary. If you have to do that why not just set up the entity (corp or LLC) to be the GP to begin with? Secondly, not all banks know how to deal with a trust as the GP. There will be a hassle factor in many cases. So, in my opinion, your best bet is to use the traditional corp/LLC GP for your LP structure. Garrett
Re: Using a Trust to start a Business - Posted by RJ
Posted by RJ on May 18, 2004 at 11:20:24:
Thanks. That helps and makes sense. On the same note would a trust be a good idea for business ownership in any entity?
Re: Using a Trust to start a Business - Posted by Garrett Sutton
Posted by Garrett Sutton on May 18, 2004 at 11:36:13:
Yes, a trust can be used. It must be noted that certain trusts are not appropriate owners of a S corp. Garrett
Re: Using a Trust to start a Business - Posted by RJ
Posted by RJ on May 18, 2004 at 12:59:46:
Excellent! Can you sight a few examples because and S corp is what I was thinking of?