(Part II of II) There are special tax considerations related to the transfer of S corporation stock at the time of the owner’s death. Therefore, owners of S corporation stock must be intentional with regard to the risks (and the tax costs) associated with an inadvertent termination of the subject entity’s S corporation status. S corporation owners—and analysts—should be aware that many states tax S corporations for state corporation income tax purposes. Many states tax S corporations as if they were C corporations. In addition, many other states apply a special corporate income tax rate to S corporations. The second…
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(Part I of II) Analysts are quick to identify and quantify the implicit and explicit S status economic benefits in the S corporation business valuation. The objective of this discussion is to summarize the offsetting economic risks associated with an S corporation ownership interest. Analysts should be equally aware—and intentionally consider the risks as well as the benefits—of S corporation status in the subject private company or professional practice valuation. This discussion summarizes many of these risk factors that analysts, private company/practice stockholders, and the company/practice professional advisers should consider in the valuation of an S corporation ownership interest. Part…
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With Limited Resources, the SEC is Using a “Risk Analytics” Strategy to Target Areas of Concern, Explains Exec at Conference Recent examinations of newly SEC-registered private equity firms is helping regulators understand the complex world of private equity, according to delegates and speakers at PEI’s CFOs and COOs Forum 2013 in New York, writes Nicholas Donato at Private Equity Manager. More:
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U.S. Middle Market Leaders Express Preferences re: Spending, Debt, and Fiscal Cliff The National Center for the Middle Market (NCMM) recently (early December 2012) conducted a survey of 1,000 U.S. middle market business leaders across all industry sectors and geographic regions to gauge their preferences for the outcome of the negotiations. Here’s what they found:
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Business Owners Need to Establish Clear Guidelines for Future Buyouts with Their Partners John Markel explains that it’s critical for partners to put together a buy-sell agreement that establishes in specific detail the standard of value, the level of value, and acceptable methods for funding a buyout. Here’s why.
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Successful Exit Key to Current Performance—and Future Sponsorship Opportunities Chris Manderson at PE Hub writes that in the private equity world today, sponsors’ track records in successfully exiting investments are a major factor in fundraising. If sponsors cannot exit previous investments and provide returns, they will find it much more difficult to raise subsequent funds: