Legal Question in Business Law in California
A C Corp has 2 partners with a 70% / 30% split
the 30% owner is the key person running the corp
the 70% owner dies
Does the 30% key person get a step up in ownership or what happens
2 Answers from Attorneys
Unless there's a written agreement to that effect, the beneficiaries of the 70% owner acquire the decedent's ownership interest.
Mr. Cohen is correct; the shareholder interest is a personal interest and passes to the beneficiaries via the trust, will or intestate succession....hence the reason you would want a shareholders agreement. At this point in time, if you want that 70% interest, there would need to be a valuation of the stock and for an attorney to draft the transfer/sale of shares agreement.
By Grace...
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