About the Course
Introduction
This CLE/CPE course will provide practical guidance to tax counsel and advisers on the challenges of choosing a legal entity for startups, how business type and potential exit plans can influence entity choice, and planning for existing businesses where a change in tax classification can meaningfully change owners’ financial outcomes. The panel will discuss key provisions of the One Big Beautiful Bill Act (OBBBA) to be considered in entity selection, the influence of business type and stage on entity selection, qualified small business stock or “QSBS” planning and opportunities, and avoiding the tax pitfalls reorganizations and dispositions. The panel will also discuss capital vs. profits interests in rewarding key people, changes in some allowable deductions and exclusions under OBBBA, exit strategy planning, and other critical considerations for effective tax planning.
Description
OBBBA made sweeping changes to the tax code, impacting decisions on entity selection at formation or potential conversion to another entity form. Choosing an entity's legal structure is complicated, with new tax laws that include the permanent 21% corporate tax rate, scaling up the QSBS exclusion, permanently extending the 20% QBI deduction, 100% first-year bonus depreciation for qualified assets, and a variety of limitations for counsel to consider.
Choice of entity considerations for startups must involve a planning approach to structuring the company that will enable it to achieve its financial and operational goals. For those that intend to issue stock/options, raise capital, spin off separate business lines, or deal with the particular issues of cashing out or business succession, the choice of entity at the beginning can have a significant tax and operational impact on the business. For pass-through entities that have to navigate the 20% tax deduction and its many exceptions, a company's current or intended activities must be evaluated. For others, a conversion to a C corporation should be an available option as well.
State law is also an important consideration when choosing a legal entity. Some states have different tax rates for various entities and are taking differing approaches on how closely they conform to the federal tax law for state income tax purposes. The complexities involved in entity selection or conversion require counsel to guide business owners to set up the right type of entity to meet initial goals with the flexibility to change the entity form as the business evolves. Failure to do so can create avoidable tax difficulties for business owners in the operation, liquidation, or succession of the company.
Listen as our experienced panel provides a detailed examination of the tax planning considerations and opportunities in advising clients on choosing a business entity.
Presented By
Mr. Proctor is an attorney with the firm’s Tax and Benefits Team and primarily focuses on transactional tax matters related to mergers and acquisitions, renewable energy development, and organizational structuring. His renewable energy work focuses on project development, project finance, joint ventures, and tax credit monetization. Mr. Proctor works extensively with both developers of projects eligible for renewable energy tax credits under the Inflation Reduction Act as well as manufacturers of alternative fuel vehicles and producers of tax credit-eligible components to advise on structuring, compliance, and the purchase and sale of tax credits. In addition to his renewable energy practice, Mr. Proctor advises clients on federal, state, and international aspects of business transactions including mergers, acquisitions, reorganizations, capital raises, entity formation, venture capital and private equity transactions.
Ms. Rallis advises clients on sophisticated domestic and international tax matters, with a particular emphasis on cross-border tax planning and structuring for corporations, partnerships, and private wealth entities. She has substantial experience in transactional tax issues, including mergers and acquisitions, where she provides strategic guidance on tax-efficient deal structuring. Additionally, Ms. Rallis counsels clients on tax credit-eligible components, offering support across the lifecycle of tax credits—from initial structuring and regulatory compliance to the purchase and sale of credits.
Mr. Wagner represents individuals and businesses in all aspects of tax controversy matters, as well as corporate transactions and tax planning, and general business advice. He represents clients in federal and state tax audits, tax litigation, and federal and state tax collection matters. Mr. Wagner advises and provides counsel on both foreign and domestic tax compliance, voluntary disclosure matters, excise tax issues, tax fraud, and other white-collar cases. He also advises clients on mergers and acquisitions as well as overall business organizations and corporate structures.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Thursday, September 3, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. OBBBA: Key provisions impacting choice of entity decisions
II. Impact on business operations and available planning opportunities
III. State law considerations in choice of entity
IV. Treatment of distributions based on the entity form
V. Consequences and potential opportunities in changing entity form
VI. Effective exit strategy techniques to avoid pitfalls stemming from entity form
The panel will review these and other critical issues:
- Tax and operational considerations for entity structuring
- Planning opportunities and allowable deductions and exclusions under current tax law
- State law considerations and planning opportunities
- The impact of different entity forms in structuring compensation
- Capital vs. profits interest and treatment of distributions based on entity structure
- Implications and opportunities in changing entity form
- Exit strategy techniques and avoiding unintended operational and tax consequences
