What are the advantages of pvt. ltd. co over partnership?

Question

What are the advantages of pvt. ltd. co over partnership?

Answer 1

Advantages of corporation:

i. limited liability, provided --

-- sufficient equity

-- observe corporate formalities

ii.  100% deduction for health insurance

iii. exclude 50% of gain on sale of stock (if original issue and held five years)

--  unavailable for business in which the principal asset is the reputation or skill of one or more employees (such as doctors, lawyers, accountants, financial planners, and other consultants)

iv. take ordinary loss deduction on sale or exchange of stock, up to $50,000 ($1000,000 if filing joint return)

v.  exclude cost of $50,000 life insurance

vi.  maximum pension and profit sharing

vii.  different classes of stock

viii.  perceived to be sophisticated form of business

ix.  top tax bracket is lower than top individual bracket

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