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TOPIC: Transferring a public corp into a private trust

Transferring a public corp into a private trust 7 years 1 month ago #700


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Hello all, I haven't found the answer to this yet, so I'll ask here:

Is it problematic for one to take an existing Corporation or LLC and change ownership of it by having a Trust take it over?

Does one have to notify the public of such a move in the local newspaper? Is that even necessary any more?

Thank you for your input.

Dd
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Transferring a public corp into a private trust 7 years 1 month ago #710


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A private trust can own the shares of a public entity. C-corps are better for trusts to own because they cut off the tax liability at the public entity level, whereas LLCs pass the liability through to the trust, which puts the trust in business with the IRS. A better way to handle the whole matter is for the trust to loan the company money by contractual security agreement and record a consensual lien for all the assets of the company. Now it doesn't own the company, it just ultimately controls its assets in first position. This approach protects the company against would-be attackers/plaintiffs because anyone suing the company would be collecting after the trust gets the company's assets, when there's nothing left to collect.
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Transferring a public corp into a private trust 6 years 9 months ago #781


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Hey Christian.

I was going to ask whether your approach still works with a single-member LLC that elects to be taxable as a C-corp. According to the following page, it probably wouldn't if the owner is an individual:

Single Member Limited Liability Companies

However, would your approach work with an LLC owned by a C- or S-corp and not another LLC?



Thanks.
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Last Edit: 6 years 8 months ago by Rolando.

Transferring a public corp into a private trust 6 years 8 months ago #798


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That is a question I have as well.
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Transferring a public corp into a private trust 6 years 5 months ago #823


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Why do you prefer this entity structure over a C-corp? A C-corp solves everything you're wondering.
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Transferring a public corp into a private trust 6 years 4 months ago #846


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N/A
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Last Edit: 5 years 2 months ago by Agent 11. Reason: Change
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Transferring a public corp into a private trust 6 years 4 months ago #848


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In theory, taxation of an LLC as a corp should solve the jurisdictional issue for the trust, yes. I still prefer C-corps because they are less tracked by tax paperwork. Whenever an LLC makes money of a certain amount, the payer of the revenue is required to report it on a 1099. There is no such requirement for reporting on a C-corp. The LLC was created and actively marketed by the Feds in order to cause people to unwittingly agree to such tracking of earnings by reporting requirements placed on others. That's the true reason the LLC was introduced, and the only reason it was introduced with a massive marketing campaign. It amounts to a wolf in sheep's clothing. I'm not suggesting evading corporate tax. I just don't think the earnings of the entities I control are anyone's business until tax returns are filed for the entities. I don't agree to have other entities reporting earnings for my businesses.
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Transferring a public corp into a private trust 6 years 4 months ago #849


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Hi Siobhan.

Thanks for articulating and expanding on my earlier question!

It led to a much better answer!
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Last Edit: 6 years 4 months ago by Rolando.
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Transferring a public corp into a private trust 6 years 4 months ago #850


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Thanks Christian.

Your last answer helps a lot!

It seems that everyone except me in this thread is American. What about a foreigner who wants to start a corporation to do business in America? Wouldn't it be wiser to use a foreign parent / holding company that owns the American C-corp?

I'm considering combining private express trusts with offshore corporations. I need to deal with American clients who transact only with ACH/ABA funds transfers. So, without citizenship or residency, I need a local/onshore corporation to open an American bank account. As I receive client payments, I repatriate the funds home or offshore.

Sure, it increases complexity, but it also adds a layer of protection.
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Transferring a public corp into a private trust 6 years 4 months ago #851


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Sure Rolando, you could have a foreign corporation own the US corporation. Behind that I would have a holding trust own the foreign corporation and/or hold a lien over all its assets, and a private master trust that holds a lien over the holding trust's assets.
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