Corporate Ownership Discrepancies Risks

Summary

Discrepancies between corporate ownership records and tax filings can lead to tax audits, legal disputes, and regulatory compliance issues. Failure to file biennial statements may result in penalties or dissolution. To transfer shares in New York, review bylaws, obtain board approval, complete a stock transfer form, update records, and notify the state. Tax implications include potential gift tax, capital gains tax, and the need for proper valuation. Consider professional appraisal for fair market value compliance.

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Yes in the state of NY, if a corporation lists officers on form *-e but doesnt list the same ownership breakdown in the articles of incorporation, it that okay?
Hi ****! Your question involves corporate compliance. Generally, Form *-E (Compensation of Officers) and Articles of Incorporation serve different purposes. The Articles of Incorporation typically outline ownership, while Form *-E reports officer compensation for tax purposes.
Do you have concerns about specific discrepancies or potential legal issues arising from this difference?
Correct. So if the SOS shows * person as *% owner, but when the company does taxes they file the *-e and list a */* split, are there any risks?
There could be risks involving discrepancies between ownership records and tax filings:
- Tax Audits: IRS may scrutinize inconsistent ownership and compensation reports.
- Legal Disputes: Potential conflicts among shareholders or officers.
- Regulatory Compliance: False filings can lead to penalties or corporate dissolution.
Are you facing a specific issue or just exploring potential risks?
exploring potential risks
If you're exploring potential risks, here are some key considerations:
- Tax Audits: Inconsistent information can trigger IRS audits.
- Legal Disputes: Discrepancies might lead to conflicts among shareholders or officers.
- Regulatory Compliance: Incorrect filings can result in penalties or corporate dissolution.
Have you observed any specific discrepancies that concern you?
The biennial statement has not been filed since *
The failure to file a biennial statement since * could lead to serious consequences, including penalties and the potential dissolution of the corporation.
Would you like to know the steps to get back into compliance with the biennial statement filing?
What is the best course of action when an owner of a corporation wants to step down and transfer their shares to a family member?
****, here are the steps to transfer shares and step down from the corporation:
*. Review Bylaws and Shareholder Agreement: Check if there are any restrictions or procedures for transferring shares.
*. Board Approval: Obtain approval from the board of directors if required.
*. Stock Transfer Form: Complete a stock transfer form and have it signed by both parties.
*. Update Corporate Records: Update the corporation's stock ledger and other relevant documents.
*. Notify Secretary of State: File any necessary amendments with the Missouri Secretary of State.
Is there a specific detail about the transfer process you need more information on?
In NYS What is the best course of action when an owner of a corporation wants to step down and transfer their shares to a family member?
****, here are the steps to transfer shares and step down from the corporation in New York State:
*. Review Bylaws: Check restrictions or procedures for transferring shares.
*. Board Approval: Obtain board of directors' approval if required.
*. Stock Transfer Form: Complete and sign a stock transfer form.
*. Update Records: Update the corporation's stock ledger and relevant documents.
*. Notify State: File necessary amendments with the New York Department of State.
Would you like more detailed information on any of these steps?
Are there tax implications to do this?
Yes, there can be tax implications when transferring shares within a corporation:
- Gift Tax: If shares are gifted, it might trigger federal gift tax.
- Capital Gains Tax: If shares are sold, capital gains tax may apply.
- Valuation: Shares need proper valuation for tax purposes.
Would you like more details on any of these tax implications?
yes valuation
For valuation purposes when transferring shares within a corporation, consider these key points:
- Fair Market Value (FMV): Determine the FMV of the shares, often requiring a professional appraisal.
- Documentation: Keep detailed records of the valuation process.
- IRS Compliance: Ensure compliance with IRS rules on gift and capital gains taxes.
Would you like more information on how to get a professional appraisal for the shares?