The new Regulations will allow for imaginative and unique international planning opportunities. For example, a U.S. business with a single foreign owner which is operated as a sole proprietorship or a division is subject to individual taxation by both the foreign country and United States. Under the new Regulations, a one-member entity organized in the United States will be disregarded and taxed as a sole proprietorship for U.S. tax purposes but may be considered a corporate entity for international taxation purposes. Country Z shareholders owing stock in foreign corporations are not subject to double taxation as a result of the liquidation of a foreign corporation. Thus, careful consideration and a thorough understanding of both the U.S. taxation of international transactions and the international taxation of transactions within the U.S. are essential in doing any substantive planning in this area.
Corporate shareholders are only liable to the extent of their investment in the corporation.
Partners in a general partnership are liable for all debts and obligations of the partnership. Continuity of Life . Partnerships generally terminate on a fixed date. Free Transferability of Interest . Generally, state law prevents the transfer of a partnership interest, absent unanimous consent of the partners.