z***n
发帖数: 39 | 1 "Corporations have been in existence for a long time and generally have a
well established base of both statutory and case law guidance. Although each
jurisdiction may have different rules, regulations and cases that govern
corporations and some jurisdictions may be more favorable to corporations
than other jurisdictions, general corporate principles exist that can be
examined when determining the type of entity to use for a new venture. If a
corporation is chosen, the jurisdiction for formation should be carefully
analyzed to determine the most advantageous jurisdiction. Many businesses
prefer corporations because of the long standing history and general feeling
of comfort regarding issues that are important to the founders of a
business, such as liability protection and corporate governance. Financing a
corporation is a path that has been well trodden and individual strategy
based on the company's circumstances and business plan becomes the focus of
financial planning. If a high technology company plans on funding its
operations through venture capital, formation of a corporation is generally
preferable to other types of entities due to general familiarity with the
corporate structure and a long history of investments into corporations by
venture capitalists, angel investors and institutional investors.
A Subchapter S Corporation, generally referred to as an S Corporation, is a
variation on the corporate entity. An S Corporation provides the same
general protections as a corporation and is subject to the same corporate
governance rules and regulations as a corporation; however, S Corporations
generally provide a tax benefit to the company. An S Corporation is subject
to limitations on the number and type of eligible shareholders. An S
Corporation is limited to 75 shareholders (subject to specified counting
considerations, for example, husband and wife) and, in general, only
individuals and not entities are allowed to be shareholders of an S
corporation. In addition, shareholders cannot be nonresident aliens. There
are a few exceptions to the rule denying entities as shareholders, however,
the exceptions generally relate to trusts formed for estate planning
purposes controlled by a shareholder. Another corporation is generally not
allowed to be a shareholder of an S Corporation which may create an issue if
the funding of the company depends on institutional investors or venture
capitalists. Most high technology companies obtain financing from venture
capital funds, institutional investors or angel investors which are
generally formed as entities that are not allowed to be shareholders of an S
Corporation. Although an S Corporation is generally favored by high
technology companies that will be funded by the founders, a high technology
company that plans on obtaining significant funding from external sources
will generally not be eligible to become an S Corporation.
A limited liability company is a newer type of entity, as compared to
corporations, that has gained wide acceptance and is the preferred choice of
entity in certain industries and/or transactions. A limited liability
company provides a lot of the same general protections as a corporation, and
although an analogy can generally be made to the rules, regulations and
case law governing corporations, significant areas of limited liability
company rules and regulations have not yet been tested in the courts.
Although capital can be raised for a limited liability company, the general
structure of a limited liability company may impose an administrative burden
if a significant number of investors are projected. Although a limited
liability company operating agreement may allow for different classes of
membership interests and ultimately may allow for more creativity in
structuring the investment transaction, the lack of court and statutory
guidance on a number of issues deter many smaller high technology companies
from choosing the limited liability company structure.
High technology companies face a number of issues that a traditional company
may not face due to concerns with its intellectual property protection and
concerns relating to financing of the company. The traditional model for a
high technology company seeking funding from venture capitalists or
institutional investors is generally to form as a corporation and sell stock
to raise capital. Although corporations may have different classes of stock
and become complicated, the general nature of corporate governance may be
more structured than a limited liability company and provide a better
framework to handle a large number of investors. Although an S Corporation
may be preferable, particularly from a tax perspective, it may not be a
viable option if the company intends to seek investments from venture
capitalists or institutional investors formed as entities to fund its
research, development and product launch. A limited liability company,
although preferable in a number of industries, may impose limitations on a
high technology company that become burdensome and outweigh the tax
advantages as the choice of entity. Careful consideration to the business
plan, future financing needs and general operating structure of a new
business venture should be made prior to the formation of a high technology
company." | m****M
发帖数: 360 | 2 Many businesses prefer corporations because of the long standing history and
general feeling of comfort regarding issues that are important to the
founders of a business, such as liability protection and corporate
governance.
What does "liability protection" mean? | z**s
发帖数: 50 | 3 避免损失自己财产，公司和个人分开
and
【在 m****M 的大作中提到】
: Many businesses prefer corporations because of the long standing history and
: general feeling of comfort regarding issues that are important to the
: founders of a business, such as liability protection and corporate
: governance.
: What does "liability protection" mean?
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