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Braintrust, </div>
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I could use some guidance on a share transfer in a closely held professional corporation. </div>
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Late last year, the corp's two partners agreed that X amount unused shares in the corporate "bank" should be transferred to younger partner, to make younger partner the majority shareholder and compensate for outstanding performance. Older partner used a small
amount of older partner's shares to make the majority. (majority shareholder will soon-ish retire, cash out remaining shares in future). The transfers were signed off by corp's accountant.</div>
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The concern by some parties is the value of older partner's remaining shares; when older partner cashes out, and the sells his shares at an exponentially higher rate, how will the corp justify the (inevitably) dramatic increase in price of the shares? </div>
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In reviewing the transaction, my concern is that legal concerns are being bled with accounting/tax concerns. I guess my question is, based on my hypothetical, is there legal advice - not tax advice - with regards to future IRS implications due to the dramatic
share value price increased, that a reviewing attorney should consider? </div>
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Much appreciated. </div>
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<b><span style="font-size:7.5pt; font-family:Verdana,sans-serif; color:rgb(23,54,93)"></span></b></p>
<p style="margin:0px;font-size:16px"><b><span style="font-family: Verdana, sans-serif; font-size: 7.5pt">TOM LEE<u></u><u></u></span></b></p>
<p style="margin:0px;font-size:16px"><span style="font-family: Verdana, sans-serif; font-size: 7.5pt">Attorney</span><span><u></u><u></u></span></p>
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