Miles & Stockbridge’s tax lawyers work with their colleagues throughout the firm to help business clients effectively plan and administer their operations for tax benefit maximization during the entire life cycle of a business. Choosing the right business entity at the formation of the business is the foundation of efficient tax planning, a subject in which Miles & Stockbridge tax and business lawyers have substantial experience. We help clients evaluate whether an S corporation, C corporation, limited liability company (LLC), partnership (LLP) or some other vehicle is an appropriate way for them to meet their growth and financing needs while maximizing tax advantages. We then help them create the appropriate management and organizational structure. Because entity taxation differs from state to state, we are aware of the various taxes that states currently impose. We are always alert to the benefits of creative entity variations (for example, combining employee ownership within a partnership structure) that are suited to meet the client’s business tax-planning needs.
In considering the operational aspects of the business, our tax lawyers give advice on creative employee compensation, tax-efficient ways to grow and reorganize the business (including representing buyers in strategic acquisitions) and, for closely held businesses particularly, provide for innovative succession planning which often integrates with the individual owners’ personal estate planning.
Finally, during the disposition phase of the business, we represent business owners in structuring all manner of exit strategies, including both tax-free and taxable transactions.
Our advice to businesses includes the following areas:
- Benefits and compensation. We work with large and small private-sector employers so that their tax-qualified pension and profit-sharing plans are properly documented and in compliance with applicable IRS regulations. Our lawyers also work to design non-qualified equity and deferred executive compensations intended to meet IRS rules on integration with such plans.
- Employee stock ownership. ESOPs are an effective tax-management tool, and our benefits and tax lawyers regularly help small business owners sell their shares to a newly created plan. We also advise on the corporate entity (such as an S corporation) structured to generate tax-exempt revenue under employee ownership.
- International operations. Our lawyers are extremely knowledgeable about the complex laws governing tax treatment of operating income, royalties, dividends and interest generated by international operations. We also regularly advise on the tax treatment of asset repatriation and the tax treatment of trans-border mergers and acquisitions.
- Mergers and acquisitions. We regularly advise sellers and buyers on mergers and acquisitions to create the best tax advantages. We work to structure the deal so that sellers receive the most tax-favorable tax treatment and buyers maximize tax advantages from amortization, depreciation and borrowing costs.
- Real estate. We help clients structure the appropriate entity to hold their real estate to obtain favorable tax treatment for operations, financing and later, disposition transactions. We also work with our real estate group in structuring tax-free exchanges and transactions to minimize state and local transfer taxes. Our substantial local insight is a key advantage in property tax assessments and appeals.