Legal Question in Business Law in New York
Breaking up of an S-Corporation
I am a 50 50 partner in an S- Corpration. My partner is taking over my 50% and will own the business. How do we have his name solely listed and my tax/legal responsibilities removed?
Thank you
3 Answers from Attorneys
Re: Breaking up of an S-Corporation
To relieve yourself of your obligations to the corporation, you must properly document and execute a purchase and sale of your stock shares to your partner. Some other steps you may need to take include: officially terminating your employment with the corporation, removing your name as an authorized signer from bank accounts, etc.
Email or call my office if you have additional questions.
Re: Breaking up of an S-Corporation
you can dissolve the corporation or you must carefully document the transfer in the corporate book
Re: Breaking up of an S-Corporation
I concur with the prior authors, but also suggest that all corporate documents given out (bank resolutions, annual reports, etc. be revised to show the change of stockholders, officers, etc. If any personal guarantees were issued, you must receive an indemnification agreement to protect you from post-termination liabilities.
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