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Ryan Perry Discusses Profits Interests and their Potential Business Benefits and Caveats in New Article 02/27/2017

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Corporate, Taxation.
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rjp-headshot-photo-2016-m0949892xb1386One of the first and most important tax-driven decisions a founder must make is the type of entity in which to house his or her venture. Though much ink has been spilled over the pros and cons of choosing a corporation versus a limited liability company, or LLC, one thing is certain: most folks understand corporations better than LLCs. And who could blame them? LLCs can be complicated entities – so flexible that they often seem downright weird. As a result, even when a founder decides that an LLC is the right fit, it is often structured to look as much like a corporation as possible. We denote membership interest as stock-like units, we view boards of managers simply as directors by another name, and yes, we sometimes even issue options to employees. Equity compensation strategies in the world of the LLC, however, can be much thornier propositions than they are for the humble corporation.

For more information about profits interests and other equity compensation strategies, read the full article or contact Ryan Perry.

Highlights from MBBP Life Sciences Series Panel 2 – Laying the Foundation for Growth: Entity & Equity 07/05/2016

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Client News, Corporate, Events, Life Sciences, Venture Capital & Private Equity.
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On Wednesday June 22nd, the offices of Morse, Barnes-Brown & Pendleton were filled with a crowd of people for a life sciences panel discussion on “Laying the Foundation for Growth: Entity & Equity.”  Esteemed panelists included Marc Cote, COO of Accellient; Jeffrey Solomon, Managing Shareholder of Katz Nannis + Solomon; and MBBP’s own John Hession as moderator.

The panel explained to the audience the importance of understanding the different entity options when starting a new business, and JMH Headshot Photo 2015 (M0846571xB1386)provided important tips on how to pick the right fit for the business.  John Hession stated that when choosing an entity it is crucial to consider where you plan on heading with the business and the long-term goals, how long before you generate money, investments, exit strategy, and how long before you will be investing money of your own into the business.

Jeffrey Solomon explained that most investors will insist that your business is a Delaware C-Corp.  He detailed that although LLCs can be beneficial because of their pass through tax benefits, they also have more complexities with tax filings.  However, since C-Corps are able to receive 1202 tax treatment and exclude gains, C-Corps are typically preferred.  The panel also discussed equity strategic considerations, including restricted stock options, with Marc Cote describing the importance of filing an 83(b) within 30 days of executing the agreement.

These were merely a few of the insightful topics discussed at the 2nd Life Sciences Series Panel.  The next panel in September will be equally educational, so keep an eye out for further details, including registration information, on our site.

Mark Tarallo Teaching at IP & Entrepreneurship Clinic 03/30/2016

Posted by Morse, Barnes-Brown Pendleton in Attorney News, Events, MBBP news.
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Attorney Mark Tarallo will teach at the Intellectual Property & Entrepreneurship Clinic of Suffolk Law School tomorrow on the subject of Choice of Entity.

Key topics that will be discussed:

  • Choice of Entity in Formations
  • Issues to Consider When Choosing an Entity
  • Equity Compensation Plans for Different Entities

Tax Considerations in Choosing the Form of Business Entity 04/11/2014

Posted by Morse, Barnes-Brown Pendleton in Attorney News, New Resources, Taxation.
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Corporate and Tax Attorney Charles Wry, Jr. By: Chip Wry

Founders of a new business typically realize early on that they need to conduct the business through a legal entity to limit their personal liabilities for the debts and obligations the business generates. Often, the three entity types from which the founders must choose are the “C” corporation, the “S” corporation and the limited liability company (or “LLC”). While all three entity types insulate the founders from personal liability, the differences among the three types for tax purposes are substantial. A C corporation, on the one hand, reports and pays tax on its income separately from its owners. The income or loss of an S corporation or LLC, on the other hand, generally is reported by the owners on their personal returns. The choice, therefore, is often tax-driven and requires an analysis of how the founders expect to grow and profit from the business.

View the full article to learn more.

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