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Law Pro
Law Pro, Attorney
Category: Business Law
Satisfied Customers: 24029
Experience:  20 years experience in business law - sole proprietor, partnership, and corporations
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I have a business that is a corp, but would like to take it

Customer Question

I have a business that is a corp, but would like to take it out of my name completely and put it in my husbands name or put him as 95% owner and me as 5%. Could you please tell me how I can go about doing each? Thanks
Submitted: 11 months ago.
Category: Business Law
Expert:  Law Pro replied 11 months ago.
Hi! My name is Fred and I'll be the attorney assisting you.

There are no share transfer restrictions within the Articles of Incorporation or on the shares themself - correct?
Customer: replied 11 months ago.


Not that I am aware of.

Expert:  Law Pro replied 11 months ago.
OK, do you hold the corporate records of the corporation? I presume so but just want to make sure.
Customer: replied 11 months ago.

Yes

Expert:  Law Pro replied 11 months ago.
OK. Then this is simple:


Draft a purchase agreement - it can be for $1.00.

1) Once a purchase price has been decided on, a purchase agreement should be drafted that outlines the number of shares being sold and the effective date of the sale. Purchase agreements can also be used to finance the sale and attach additional terms and conditions to the transaction, such as covenants not to compete.

2) Transfer the share certificates. Once the transaction has closed, the transferor (you) should deliver share certificates to the transferee evidencing their ownership of the shares. The corporation also will need to update its record book to reflect the change in share ownership.



There isn't much to the transfer of the shares - you just need to formalize the transfer with the share certificates and in the corporation's record book.

Customer: replied 11 months ago.


Ok, Thank you. Do I need to let any agency know? Also, how does it work with my bank acct? and my licenses?

Expert:  Law Pro replied 11 months ago.
Do I need to let any agency know? No.


Also, how does it work with my bank acct?

You may have to talk to your bank and get a change of signatures for the bank accounts.


and my licenses?

Since a corporation is a distinct separate entity - none of that is changed as to licensing. However, if you are specially licensed - ie. like a cosmotologist, a doctor or attorney - there may be issues. You didn't mention anything like that so I didn't mention that before. If you are not personally licensed - then no issues.

The transfer will be reflected in next years taxes though - as to who is taxed on the corporate income.


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