Business Law
Business Law
Business Law
How Escheat Laws Might Affect Your Business
Escheatment is one of those legal terms you may not know much about. But be it could cost your corporation substantial interest, fines or penalties. The word means turning over to your state any abandoned, lost or unclaimed property, both tangible and intangible. This property is often transferred to the government because a person died […]
Business Law
Lease Business Property to Your C Corporation
It’s generally not a good idea for a closely held C corporation to own assets with high appreciation potential. A classic example is real estate. If your corporation owns property, it’s likely the appreciation will be hit with double taxation when the real estate is sold and you take the resulting cash out of the […]
Business Law
Handling Corporate Shareholder Loans
Borrowing money from your corporation is a viable way to get your hands on some cash without triggering a current tax liability. Of course, the transactions must be structured as a legitimate loan, with repayment terms and all the necessary paperwork. How Below-Market Loan Rules Work When money is loaned by a corporation to a […]
Business Law
Tax-free Divisions of Controlled Corporations
Breaking up a corporation with subsidiaries can be hard to do. However, with the right legal help, you might be able to split apart your corporate group without any dire tax consequences to the companies or the shareholders. Background: If a parent-subsidiary group of corporations meets the requirements of Section 355 of the tax code, […]
Business Law
Get Ready for Due Diligence Long Before a Sale or Merger
It may seem odd, but as soon as you start up a business, you should begin preparing the documentation needed to sell or merge with another enterprise. It may be years down the road but the records often required in today’s M&A environment can be overwhelming. If your recordkeeping has been shoddy, it can be […]
Business Law
What if a Customer Doesn’t Pick Up Property?
Is this your situation? You provide a service that involves servicing products that your customers own. For example, you fix broken construction equipment, make alterations to clothing, frame customers’ art or a repair computers. Let’s say you provide the service, but a customer does not respond to phone calls and e-mail messages after you notify […]
Business Law
Sell (or Buy) a Corporate Business With a Tax-Free Reorganization
There are two basic ways to sell an incorporated business — sell the assets or sell the stock. For two good tax reasons, sellers usually prefer stock sales: 1. Assuming you’ve owned the shares for more than a year, your profits will generally be taxed at a maximum federal rate of 20%. This applies equally […]
Business Law
Watch Out for Unfavorable ‘Related Party’ Rules
Beware of the tricky “related party” tax rules if you are considering buying or selling business assets or an ownership interest (corporate stock or a partnership or LLC interest). The Internal Revenue Code contains a number of rules aimed at penalizing sales between individuals or entities that are considered closely connected and thus more likely […]
Business Law