Читать книгу International Taxation - Adnan Islam - Страница 41

If no election is made, an entity organized under the laws of the United States or of any U.S. state or of the District of Columbia after December 31, 1996, is treated as a partnership if the newly organized entity has two or more owners or is disregarded if the newly organized entity has one owner. Any other entity (any entity organized under laws other than those of the United States or any state or the District of Columbia) organized after December 31, 1996, is

 treated as a partnership if the entity has two or more owners, at least one of whom has unlimited liability,

 disregarded if the entity has one owner and the owner has unlimited liability, or

 treated as a corporation if none of its owners has unlimited liability.

Under these rules, if no election is made, Brubeck Boilerplate’s Aukum plant operation will be treated as a corporation because its owner, Brubeck Boilerplate, does not have unlimited liability under Aukum law. Brubeck Boilerplate’s Jamal plant operation will be disregarded because the owner of the Jamal plant operation, Brubeck Boilerplate, has unlimited liability under Jamal law.

Unlimited liability is personal liability for the debts of or for the claims against the entity by reason of being an owner. An owner has personal liability if creditors of the entity may seek satisfaction of all or any portion of the debts or claims against the entity from the owner.

An entity in existence on January 1, 1997, retains the status claimed under prior law until that entity elects a different status under the 1996 regulations.