Business Entity Choice After Wisconsin Act 258 and the CTA
P
rior to 1994, business entity selection in Wisconsin and around the country was much more limited, as fewer choices were available for entity structure. Business owners faced a choice: They could either pay lower taxes and receive more tax flexibility at the cost of assuming unlimited liability or enjoy limited liability in the corporate model and be subject to the double income tax regime of C-corporations. While some businesses chose limited partnerships, these were typically used for real estate tax shelter investments or for family estate planning, making them a niche choice.
By Joseph W. Boucher, CPA, MBA, JD and
On Jan. 1, 1994, Wisconsin established limited liability companies (LLCs), which dramatically changed the choices offered for business entity formation. As you can see from Exhibit A, “Business Entities – A Brief History,” and Exhibit B, “Wisconsin Entity Formation by the Numbers,” there have been enormous changes in business entity choice over the last 30 years.
Exhibit A
Julijana Englander, JD
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On Balance
January | February 2024
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