Total Credits: 1.2 Self Study
Recording available after original program date, 6/15/2022
Stockholders’ agreements can make or break a closely held company. Voting control is allocated, distribution policies established, buy-sell mechanisms defined, and the relationship of the owners organized. Most of the big decisions of a closely held company are made in the stockholders’ agreement. In the context of S Corporations, these agreements take on even more importance in the form of various restrictions to ensure the corporation does not lose its pass-through status for federal income tax purposes. This program will provide you with a guide to planning and drafting the most essential provisions of stockholders’ agreements for C and S corporations.
• Practical uses of stockholders’ agreements
• Management and voting rights – what events trigger a vote and by whom
• Economic rights – distributions, taxes, and liquidations
• Information rights – access to operational, financial and tax information
• Restrictions on transferability and mechanisms to buy/sell restricted stock
• Valuation methodologies for stock that does not have a liquid market
• Protective provisions for S Corps – preventing transfers to ineligible holders
• Provisions for approving the termination an S Corp election
• Close corporations and the ability to govern the company without a board of directors
Note: This material qualifies for self-study credit only. Pursuant to Regulation 15.04.5, a lawyer may receive up to six hours of self-study credit in a reporting year. Self-study programs do not qualify for GAL Certification, ethics, elimination of bias or Kansas credit.