Posts Tagged ‘Stock Sale’

3 Proven Reasons a Connecticut Business Owner Should Elect Subchapter S

Gesture - Three Fingers (with clipping path)



Business owners of corporations will by default have a “C” Corporation.  If they are eligible and they elect, they could be a Subchapter S (“Sub S”) corporation.




An eligible Sub S corporation meets the following criteria:

The Difference Between an Asset Sale and a Stock Sale

Closely Held Businesses looking to negotiate a sale of their business will either do an Asset Sale or a Stock Sale.

Asset Sale

With an asset sale, the buyer is buying the assets of the business. These assets will be identified in the purchase and sale agreement. They may include accounts receivable, inventory and fixed assets including office furniture, machinery and vehicles. Additionally they may include intangible assets like customer lists, work force in place, goodwill and a non-compete agreement. … Continue reading »

The Difference Between a C Corporation and a Subchapter S Corporation

Business owners can maintain their corporation as a regular or “C” Corporation. Alternatively, if they are eligible, they may want to make a Subchapter S Election. Both are treated as separate legal entities. Here are the differences however:

C Corporation

While a C Corporation is a separate legal entity, it is also a separate taxable entity. The corporation will pay income taxes on any taxable income reported.

Why a Growing Business Should Elect Subchapter S Filing Status

The primary reason to make the Subchapter S filing status election is to have a single federal income tax when the business is eventually sold. 

If the corporation is not an S corporation and the company assets are sold, there will be a double tax on sale.  The first tax will be at the corporation level.  A regular or C corporation will pay a tax on the gain on the sale of its assets.  … Continue reading »

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