Posted On: 11/17/2015 12:45:04 AM
Post# of 4425
Great find eatmore. Since ORT really does not need to raise capital (which is an astounding fact), we can rule out 3 of them. These are the 2 remaining:
3) You want to give equity to your employees. In a corporation, it is easy to place shares of stock that the company can later distribute to employees in reserve. In an LLC, the members own 100 percent of the company. In order to give equity to a new member, the members must sell a portion of their personal ownership stake to the new member. This personal sale of securities could trigger capital gains tax and create other complications.
4) You want to issue equity on a vesting schedule. It is relatively easy to issue shares from a corporation that is earned over time on a vesting schedule. In contrast, because there are no shares of stock in an LLC, members usually elect to distribute profit interests. However, defining and calculating those profit interests is an expensive endeavor that requires constant monitoring of member capital accounts.
3) You want to give equity to your employees. In a corporation, it is easy to place shares of stock that the company can later distribute to employees in reserve. In an LLC, the members own 100 percent of the company. In order to give equity to a new member, the members must sell a portion of their personal ownership stake to the new member. This personal sale of securities could trigger capital gains tax and create other complications.
4) You want to issue equity on a vesting schedule. It is relatively easy to issue shares from a corporation that is earned over time on a vesting schedule. In contrast, because there are no shares of stock in an LLC, members usually elect to distribute profit interests. However, defining and calculating those profit interests is an expensive endeavor that requires constant monitoring of member capital accounts.
Quote:
top 5 reasons to change from LLC to INC --
www.forbes.com/sites/theyec/2014/12/30...rporation/
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