TaxEsqBlog -by Ronald J. Cappuccio, J.D., LL.M.(Tax)

Thursday, European governments got together to attack people trying to own and control their businesses anonymously. The governments of France, Britain, Germany, Italy and Spain got together to create laws and try to enforce treaties to force banks and governments to reveal owners of businesses in other countries. For many years the high tax countries such as the US and Europe have been trying to find ways to attack developing countries from encouraging people to start businesses. Obviously if the business can be run in a lower tax jurisdiction it is prudent for the business owners to do that. Now, with the release of the "Panama papers" which were thousands of stolen documents from a Panamanian law firm listing the names and ownership of Panamanian registered companies, European governments are using this as an excuse to limit freedom of their citizens. This follows the actions by the Obama administration in the US requiring extensive financial reporting under threat of ja...

Corporations - the traditional business Corporations are the prime type of entity used in publicly traded companies, larger entities, and when the owners want a separate taxable entity from the individuals. A corporation is set up by filing a certificate of incorporation or articles of incorporation in the state of choice. In addition to getting a separate tax identification number, the corporation should have bylaws detailing the officers, the operation of the business and the amount of shares and any particular rights in different classes of shares. Liberation files a separate tax return and pays income tax on the income earned to both the state and federal governments. After pays taxes if it wants to distribute some of the profit to the owners, these distributions are called dividends and are taxed in the income of the shareholders. This can lead to the famous "double taxation" where the corporation is taxed and then the same income is taxed again at the shareholder leve...