Stock holders younger then 14 years old

[Eddylop]

My wife has started a Corporation. She plans to hire me as an employee (President of the corporation). May I have all the fringe benefits allowed in a corporation?

Can she sell stocks to my family as follow:
2% to myself (to be considered as an employee and keep the fringe benefits)
10% to each of my two kids (11 and 12 years old)
retain the 78% my wyfe.

Can the purchase price of 1% of the stocks be $10, as soon as it is a new business without any deposited money? Today the value of the company is the $500 that costs to incorporate.

Where can I find information about common pitfals in family business (family relations between stockholders and employees)


I know that if no family relation exist between the 4 of us, everithing would be fine, but being a family????

How separated is a corporation, a husband,
a wife and their kids?

Thank you

 

[lawrat]

I am a law school graduate. What I offer is mere information, not to be construed as forming an attorney client relationship.

Do this please: read two sections:

1. Freeadvice.com -- homepage -- business law -- corporations. READ IT ALL.

Go to findlaw.com and find corporation articles in there. Also try your local bar association. Ask if they literature or contact your irs.gov and read literature about tax pluses and minuses.

Be careful of tax considerations for your children. Be careful of watered stock. It sounds like you want a close corporation - read about those and possible s-corporation status qualification. S corporation allows for pass through taxation so the same $ doesn't get taxed twice.

Hope this helps.

 

[Tracey]

The transfer to the kids will have to comply with the Uniform Transfer to Minors Act. You can read it here: http://www.legis.state.il.us/ilcs/ch760/ch760act20.htm

You can have all the fringe benefits of a corporation, as long as your wife scrupulously maintains the "Chinese Wall" between the corporation & her personal powers/finances. You should probably consult a corporate lawyer about how to manage all this. You can also read self-help law books pertaining to corporations & family corporations.

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This is not legal advice and you are not my client. Double check everything with your own attorney and your state's laws.