Purpose and Scope of the Company

Purpose and Scope of the Company

Most people initially think that an entity is only formed and organized for asset protection. Most people don’t know that if the appropriate entity is chosen and set up properly it can help meet the following goals:

Income tax:  reduction, elimination and deferral

Provide for retirement

Centralized management

Facilitate gifting and taking advantage of the annual Gift Tax Exemption

Maintain control of the entity after making gifts and sales

Reduce estate taxes

Allow fractional interest in the entity without fractionalizing the underlying assets

Provide centralized policy and risk analysis for the family’s investments

Provide for wealth transfer from one generation to another

Provide business succession planning, along with buy-sell opportunities

Control cash flow to members

Reduce California taxes

Resolve family business disputes privately

Provide confidentiality

Avoid business interruption

Avoid probate

Restrict the ownership rights of non-family members and prevent transfers due to failed marriages

Prevent commingling of assets for family members

Make withdrawals from the entity difficult to do

Protect members from entity creditors

Qualify for Family Business Exclusion

Promote knowledge of family business

Provide medical insurance and other benefits to employees with pre-tax dollars

Provide income for family members





If you want to learn more about entity formation and goals contact us at:

2070 Pioneer Court
San Mateo, CA 94403
Tel 650-572-7933
Fax 650-572-0834

McDowall Cotter provides comprehensive legal services in three areas of practice: civil litigation; business; and wealth preservation. To learn more visit us at https://www.mcdlawyers.net. We are a San Mateo based law firm and for more than 50 years, McDowall Cotter’s chief objective has been to deliver exemplary legal services that are personalized, effective and efficient.