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Is the company an S corporation or an LLC?
Hello, It's a S corporation not an LLC
Thanks for the additional information. You would want to draft a sharesholders agreement. You could find copies on line. An attorney would usually look at three different ones and draft one for your particular needs. If you want to draft it yourself, you would do the same thing. All shareholders agreements are different, so it is best to look at at least three to make sure the one you want is good for you company. Feel free to ask follow up questions.
Thanks for that, but isn't a shareholder agreement different than some sort of note for funding the entity? or are you suggesting I incorporate the two together?
Hello again. Yes. The shareholders agreement is all encompassing; it includes many different terms including , funding arrangements, profit distribution, buy sell terms. Sometimes people refer to the individual terms as agreements, but when drafting it is all in one in most cases.
Ok, However, we already have a shareholder agreement, what should I use as a separate document for the funding of this Corp ? or would it be best just to do an addendum?
James: If you go with a separate agreement you have to make sure that there is nothing in the shareholders agreement contradicting the terms of the funding agreement. I would attempt to keep it all together.
James: You should always check with your accountant about any tax implications regarding unequal sharing of profits in an s-corporation. If you have further questions, let me know. Best of luck.
Lastly, you may want to consider a promissory note structure if you are lending the company money and getting paid from the profits.
Ok, it sounds like that would be my best bet which is to do a promissory note.
Yes it does. Glad we worked this through. Good luck.
James: Do you have any further questions? - Damien