Legal Question in Business Law in Vermont

This question has two parts I am attempting to buy land from the family business (an S corp) to build a house on for less than fair market value. Is it legal to do this? For example if the land is worth $9000 an acre can the S Corp sell it to me for $1000 an acre. The second part of the question is: Can an S Corp sell land to an employee in lieu salary? I am not a shareholder in the corporation. I am an elected officer.


Asked on 11/04/10, 8:20 am

1 Answer from Attorneys
Kevin B. Murphy Franchise Foundations, APC

Any franchise attorney will say as long as the transaction is arms length and approved by the Board of Directors and shareholders, is will be valid. Same goes for the in lieu of salary question. Especially in this depressed real estate market, who is to say what fair market value really is? Consult with a good business or franchise attorney in your area for specific advice in completing this transaction so it hold up down the road.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Attorney

Franchise Foundations APC

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Answered on 11/09/10, 8:36 am


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