The Risks and Rewards of Becoming a Shareholder
"Whether one represents the employer or the employee, counsel is wise to consider the legal, tax, and any other consequences that follow when an employee of a corporation or an LLC is to become a co-owner of the entity," writes Stuart Pachman of Brach Eichler.
February 20, 2024 at 12:00 PM
5 minute read
Corporate RepresentationWhen Mom and Pop want to give or sell an interest in their business to a long time loyal employee, both owner and employee should be aware of what follows. Not only do the consequences differ between a corporation's employee and an LLC's employee, but also there are upsides and downsides for both owner and employee. Some of the salient differences, from the perspective of each side of the transaction, are illustrated in the following examples.
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