S-Corporations: The Common Move For Growing LLCs

The fact that you can do something does not mean it should be done. Yes, you can be hidden from prying eyes who want to know about your business or if you are associated with a business. I am not a lawyer, but I do have access to legal counsel. Based on the advice of legal counsel, I find filing under an s-corporation very useful. Proceed with extreme caution because s-corporations are used by professional criminals, thus you are perceived guilty in court. Just pay your taxes, keep updated records of financial transactions, and don’t break any laws. Doing these simple things will not only help avoid your business being audited, but helps keep you gliding under the radar of the law. The law does not want to bust you, they want to spend their valuable time catching real criminals.

Panama Papers: http://www.cnn.com/2016/04/04/world/panama-papers-explainer/index.html

Iceland Prime Minister resigns due to leak of Panama Papers: http://www.cnn.com/2016/04/05/europe/panama-papers-iceland-pm/

Note the ‘Intent to Hide Ownership’ when in court:

The California Court of Appeals in the well known case of Associated Vendors, Inc. v. Oakland Meat Co., Inc. (1962) 210 Cal. App. 2d 825, 26 Cal. Rptr. 806, [http://law.justia.com/cases/california/court-of-appeal/2d/210/825.html] listed facts that should be analyzed in determining if an alter ego situation exists and the corporate veil should be pierced and hold the shareholders liable for the debts of the corporation. One of the 19 negative facts the court listed is the “concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities.”

Thus, if you hide your ownership of your entity and you end up in court, you will have some “s-plaining” to do to the judge or jury as to the business purpose in hiding the ownership of the company.

Due to the definition of s-corporations it attracts individuals that intend to participate in shady business practices. http://www.keytlaw.com/azllclaw/forming-llcs/nevada-incorporation-scam/

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