Best way to merge C Corp and S Corp? [Medical Group]

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financial.freedom
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Joined: Fri Oct 03, 2014 1:18 am

Best way to merge C Corp and S Corp? [Medical Group]

Post by financial.freedom »

Our group is growing and picking up more contracts.

One contract is under a C Corp -- partners own equal share and are paid via W2. There is one associate paid under the C Corp via W2. After expenses, partners split what's left each month.

The other contracts and employees are under the S Corp. This is larger in scope and collections. S Corp includes one W2 employee and several 1099 employees. After expenses, partners split what's left and are paid via 1099.

It's getting a little complicated having both S Corp and C Corp, and one of the hospitals we're contracting with says they're confused by structure. Sounds like they prefer to deal with just one entity.

Questions:

1. What's the best way to combine the contracts / corporations moving forward?

2. Should we dissolve the C Corp and rewrite the shareholder agreement?

3. Any legal or tax advantages to keeping the current structure?

Thank you in advance!
J295
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Joined: Sun Jan 01, 2012 11:40 pm

Re: Best way to merge C Corp and S Corp? [Medical Group]

Post by J295 »

Retired lawyer. Former hospital board chair.
Contact your lawyers and accountants.
Topic Author
financial.freedom
Posts: 599
Joined: Fri Oct 03, 2014 1:18 am

Re: Best way to merge C Corp and S Corp? [Medical Group]

Post by financial.freedom »

J295 wrote: Thu May 06, 2021 12:29 pm Retired lawyer. Former hospital board chair.
Contact your lawyers and accountants.
Will certainly do that -- just wondering if there are any tips or questions to have lined up before meeting with them.
bsteiner
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Re: Best way to merge C Corp and S Corp? [Medical Group]

Post by bsteiner »

The lawyers will prepare an agreement of merger and corporate minutes and a certificate of merger. After the papers are signed, the lawyers will file what needs to be filed with the Secretary of State.

You should consider whether you want the surviving corporation to be a C or S corporation.
Topic Author
financial.freedom
Posts: 599
Joined: Fri Oct 03, 2014 1:18 am

Re: Best way to merge C Corp and S Corp? [Medical Group]

Post by financial.freedom »

bsteiner wrote: Thu May 06, 2021 1:38 pm The lawyers will prepare an agreement of merger and corporate minutes and a certificate of merger. After the papers are signed, the lawyers will file what needs to be filed with the Secretary of State.

You should consider whether you want the surviving corporation to be a C or S corporation.
Yes, that's one of my main questions: what are the advantages of C vs. S corp for the surviving corporation?
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