A&B (two individuals) wants to organize an entity to combine their two manufacturing businesses. Assume the business will average $1 million of taxable income from the combined businesses. Please include in your discussion a compare, and contrast of the different forms of business regimes including a discussion of a corporation, an S corporation, partnership, and a limited liability company. Also, include in your discussion the different tax consequences between the different types of entities including which of these regimes requires the business entity to pay tax on the income earned and which of these regimes requires the entity owners to pay tax on the income earned by the entity. Please address tax implications to the entity and the owners.

1) Discuss the short term vs. long term benefits /detriments of each form of business regime.

2) What if A&B reinvest all their profits back into the business (i.e., no distributions to shareholders)? Does this change any of your advice?

3) What if A&B plans to sell their business in the short term (i.e.: less than 5 years)?

4) What if A&B want to raise venture capital funding through a series of preferred stock offerings?

5) What if A&B want to take the company public through an initial public offering?

6) What if the business were service businesses? Does this change your advice? What entity would you advise your client to form? Please describe how Section 199A effects your decision.

7) What if the entity is already public as a C Corporation and has GAAP book income more than $1 Billion but US taxable income is zero because of bonus depreciation and off- shore international tax planning? Are there any additional tax issues you have be concerned about?

8) What if the corporate tax rate is increased to 28% as Biden once proposed? Does this change your advice?