Thursday, April 01, 2004

THE IMPORTANCE OF SIMPLE CORPORATE DOCUMENTATION Here's a good example of how important corporate documention is. No, I'm not talking about bookingkeeping, but simple things like stock certificates. No one wants to pay lawyers to get these things done right at start-up, then we are three years down the road, the perfect buyer has arrived, and it turns out you don't even know who owns the company. Or maybe, one of the guys has forgotten to pay the company's taxes, so you're thinking that it's pretty cool that you don't really own any of the Company. But then, we discover that you got a K-1 on the company's losses in a prior tax year.

Now, you've got a lot of corporate clean up to take care before you can get that big fat check from the buyer. And God help you if the buyer wants a legal opinion on the company. And God help you if you've been telling some other government agency that your ownership is different than what you've been telling the IRS.

Lesson here: Do it right from the get-go! And pay a lawyer to do it, or you could be in a world of pain later or have tax liabilities that you didn't expect.

1 Comments:

At 7:33 PM, Anonymous life insurance quote said...

Nice post, interesting information. I do agree with this, it is very important to have a lawyer to do it. Thanks for sharing.

 

Post a Comment

<< Home