Evaluating proposed business transactions to determine the most appropriate tax and legal structure of the transaction to obtain maximum tax benefits for the client. Negotiating, structuring and implementing mergers, stock and asset acquisitions and spin-offs and buying and selling businesses. Shareholders´ Agreements, consolidations, joint ventures, corporate recapitalizations, reorganizations, restructurings and entity conversions, and advising clients on the federal and state tax aspects of these transactions.
Formation of business ventures and transactions – choosing among corporations, partnerships and limited liability companies (LLC) and not for profit corporations; tax planning for start up companies.
A Buy-Sell Agreement is a contract between owners of a business (shareholders or partners) that restricts their right to transfer their ownership interest to third parties. The agreement assures the orderly succession to ownership and management of the business upon the happening of certain events, such as (1) death, (2) disability, (3) retirement, (4) withdrawal, (5) bankruptcy, (6) divorce, (7) irreconcilable differences regarding conduct of the business, and (8) an owner´s desire to sell his or her share of the business.
Buy-Sell Agreements may be used by corporations, S corporations, joint ventures, limited liability companies, limited partnerships, general partnerships, and any other type of business relationship.
Drafting Buy-Sell Agreements for one or more of the following reasons:
- To create a market for the interest and provide liquidity to the owner or the owner´s family after the business owner dies.
- To avoid conflict among owners. The owners can agree beforehand that if one of them leaves the business, that person´s interest will be purchased by the surviving owners or the business itself.
- To fix estate tax values. Owners may feel that IRS will set an unrealistically high value for the interest of a closely held business, and that having a legally binding Buy-Sell Agreement in place will establish the value agreed upon between the parties to the agreement.
- To agree on a method for valuing an owner´s interest in the event of retirement, disability, termination of employment, and other circumstances.
- To establish the funding mechanism and payment terms in the event of a buy-out.
- To restrict the transfer of ownership of the entity, including preventing a former spouse or creditor from becoming a shareholder.