News & Analysis as of

Closely Held Businesses

Is It Debt Or Equity? Is It A Dividend Or Compensation? It Must Be A Closely Held Business

by Farrell Fritz, P.C. on

I had a call a couple of weeks ago from the owner of a business. His brother, who owned half of the business, owed some money to someone in connection with a venture that was unrelated to the business. The brother didn’t have...more

Insight on Estate Planning - April/May 2018

In This Issue: - Estate planning for your business: Use an ESOP to properly address your closely held company - Are your assets protected from creditors? - Preparing a parent for a nursing home - ESTATE PLANNING...more

Have Your Business Do Onto You As You Would Have Your Business Do Onto Others (*)

by Farrell Fritz, P.C. on

Relationships are Hard- The well-being of a closely held business is based, in no small part, upon a number of relationships, including, for example, its dealings with customers, suppliers, service providers, employees,...more

The Closely Held Business & The Minority Owner: Accessing Information From The Entity’s Tax Return?

by Farrell Fritz, P.C. on

Why a Minority Owner? I have often asked the question, “Why would someone willingly become a minority owner in a closely held business?” Similarly, I have often advised clients who control their own business not to admit a...more

Appeals Court Reinstates Derivative Claims Dismissed for Conflict of Interest Where Parties’ Relationship Not “Especially...

by Farrell Fritz, P.C. on

Almost always there are elements of acrimony and intense emotion in litigation between co-owners of closely held business entities. The degree of toxicity can vary widely from case to case, although it tends to show up more...more

Changes in Planning for Closely Held Businesses Under the New Tax Law

The tax changes recently signed into law increased the exemption from federal estate and gift taxes to about twice the prior level. Even though the increase is temporary and will expire at the end of 2025, it changes some of...more

Estate planning for your business: Use an ESOP to properly address your closely held company

If a substantial portion of one’s net worth is tied up in his or her closely held business, it’s critical to have an exit strategy. This article explains why an employee stock ownership plan is one tool that offers a...more

[Webinar] Closely Held Family Business Disputes – the Law and Beyond - February 20th, 11:00am CT

by Robins Kaplan LLP on

Tuesday, February 20, 2018, 11:00 A.M. CST -- Closely held business disputes possess elements of garden-variety commercial litigation, and elements of family conflicts (even when the business is not a family business)....more

What the New Tax Law Means for Individuals and Closely Held Business Owners

by McGuireWoods LLP on

December 20, 2017 President Trump intends to sign into law H.R. 1 (the act), the most comprehensive change to the Internal Revenue Code since 1986. The text of the act numbers nearly 500 pages. What follows is a brief summary...more

Thinking of Selling? Start Early, Build Your Team

by Murtha Cullina on

As 2018 looks to be a favorable M&A environment, many business owners may come to the conclusion that it is time to sell the family business. While it is true that some businesses sell as a result of an offer that comes “out...more

Eliminating Fiduciary Duties in a Closely Held Business

by Burns & Levinson LLP on

Longstanding Massachusetts law holds that officers, directors, partners, and even equity holders in closely held corporations owe their respective entities and related equity holders a fiduciary duty to act with the utmost...more

Employee Stock Ownership Plans: Is an ESOP Right for Me?

by Benesch on

A better understanding of the advantages and disadvantages of ESOPs can help any business owner determine if a partial or total sale to an ESOP is a solution that makes sense. And that owner needs professional advisors who...more

Transitions in the Family Business, Part I: Caring for the Goose

Last week, Bradley’s Family Business Advocates team co-hosted Transitions in the Family Business: A Conversation with Family Business Owners and Leaders with Warren Averett. ...more

Closely Held Businesses: You Make the Plan, or a Plan Will Be Made For You

by Ward and Smith, P.A. on

Who is the Better Planner for Your Affairs: You or the State? Planning for succession of a closely held business is a lot like making a will. An individual has the opportunity to make a will which directs how the...more

Treasury to Withdraw Proposed IRC §2704 Regulations

by Bryan Cave on

The Department of the Treasury has withdrawn the controversial proposed regulations for Section 2704 of the Code. Section 2704 limits valuation discounts in family-controlled entities for certain lapsing rights and...more

IRS and Treasury Department to Withdraw Proposed Tax Regulations Curbing Valuation Discounts

by Davis Wright Tremaine LLP on

In a positive development for closely-held business owners and their families, the Treasury Department recently recommended the complete withdrawal of its proposed tax regulations that would have severely limited the...more

IRS and Treasury Department Announce Withdrawal of Proposed 2704 Regulations

by Tucker Arensberg, P.C. on

On October 4, 2017, in its Second Report to the President Identifying and Reducing Tax Regulatory Burdens the U.S. Department of the Treasury announced that it is recommending the complete withdrawal of the proposed 2704...more

Succession Lessons from The Crown

Leadership transition from parent to child in a family-owned business is challenging. I noted a few factors in the successful, though difficult, transition portrayed in The Crown that may be helpful in your own “kingdom.”...more

Court Holds That Majority Shareholders In Closely Held Corporation Do Not Owe Fiduciary Duties To Minority Shareholders

by Winstead PC on

In Herring Bancorp, Inc. v. Mikkelsen, a corporation acquired a majority of the outstanding shares of preferred stock by “repurchasing” those shares in accordance with the articles of incorporation, including the shares owned...more

Definitions in Shareholder Agreements Matter When Transferring Family-Owned Business Stock

by Murtha Cullina on

Owners of family-owned corporations often enter into shareholder agreements that spell out whether and to whom corporate shares can be transferred. Frequently, these agreements provide for rights of first refusal by the other...more

Best in Law: It's a Family Affair! How to Avoid the Pitfalls - Six Legal Tips to Running a Family Business

by Best Best & Krieger LLP on

Many successful businesses are family-owned. There is an unmatched pride that comes from building a business that has the capability of being passed down through generations. Yet, a family business faces unique challenges....more

New Ideas for Old School Companies

by Davis Wright Tremaine LLP on

On June 1, 2017, Davis Wright Tremaine LLP hosted its 5th annual Farm to Label Summit, bringing together food and beverage industry leaders, investors, and entrepreneurs. The program included a series of interactive panel...more

Court Holds That Shareholders In Closely Held Business Do Not Owe Each Other Fiduciary Duties

by Winstead PC on

In In re Fritz, a bankruptcy court determined whether an exception to dischargeability was present. No. 15-347950BJH, 2017 Bankr. LEXIS 930 (N.D. Tex. Bankr. April 3, 2017)....more

Massachusetts SJC Sends Reminder of Fiduciary Duties in Closely-Held Corporations

by Murtha Cullina on

In a recent decision, the Massachusetts Supreme Judicial Court ruled that directors of a corporation owe a fiduciary duty to the corporation itself, and not to the stockholders of the corporation (as is the case in Delaware,...more

Trust But Verify Regarding Financial Information

Minority owners of closely-held corporations (in New Jersey) often put themselves in a position where they are cut off from access to the company’s books and records. When that happens, several things can occur, and few of...more

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