To be a successful exit planner, it is critical that you understand the differences in business entity types in order to properly advise your clients and uncover all the planning opportunities. It is important to understand the legal and tax differences between the various entity types to best advise clients and uncover the best planning opportunities. Advisors who lack knowledge in this growing area will be left behind.

Their three-part course is designed to get the exit planning student quickly up to speed and will cover the following topics:

Part 1 - Legal Structure and Issues: The differences between Sole Proprietorships, Partnerships, Corporations, and Limited Liability Companies

1. Review certain aspects of the Revised Model Business Corporation Act, Uniform Partnership Act, and Revised Uniform Limited Liability Company Act
2. Review the formation requirements for each type of entity
3. Review the administrative and management requirements for each type of entity, including the ease of operation
4. Review the owners’ ability to raise capital (debt vs. equity)
5. Review the owners’ ability to transfer their ownership interests and the continuity of the business entity
6. Cover an owner’s personal liability depending on the type of entity
7. Summarize the pros and cons of each type of entity

Part 2 - Tax Differences Between Entities

1. Review C Corporation taxation under Subchapter C
2. Review S Corporation Taxation under Subchapter S, including what rules under Subchapter C apply to S Corporations
3. Review Partnership Taxation and highlight the flexibility provided under Subchapter K
4. Discuss Limited Liability Companies and how they are taxed (partnership, corporation, or disregarded entity)
5. What are the Employment Tax Considerations under each type of entity
6. Life insurance payable to partnerships, C-corps, and S-corps, and how life insurance impacts S-corps accumulated adjustments account (AAA) and other adjustments account (OAA)
7. Basis implementation
8. A Comparison of the different taxation types
9. 199A Planning Considerations impacting entity selection

Part 3 - What the Exit Planner Needs To Know and Life Insurance Applications

1. Key Person Life Insurance and the tax impact depending on the type of entity
2. Employer Owned Life Insurance rules and keeping the death benefit income tax-free
3. Buy-Sell Agreement Insurance Funding and techniques to maximize basis increases for remaining owners
4. Using pre-tax qualified retirement plan contributions to purchase Life Insurance in the plan
5. Life Insurance as a nonqualified executive benefit, including executive bonus plans, nonqualified deferred compensation, retention bonus plans, and split-dollar life insurance
6. Tax implications of rolling a policy out when unwinding a buy-sell agreement or nonqualified deferred compensation plan

The course requirements include a video lecture that will be followed by a final exam.