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I am purchasing a public shell and merging my private company

I am purchasing a public shell and merging my private company and want to know whether a private placement I am doing prior to the stock trading would allow investors to sell their stock when it begins trading. Will their stock be restricted? If so for how long? Can these investors register their stock to be traded?

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Damien Bosco

Attorney

Doctoral Degree

3,664 satisfied customers
Im in the midst of an acquisition of my nj s corp. I am a

I'm in the midst of an acquisition of my nj s corp. I am a single shareholder with 100% of the stock. The buyers are a private equity group. They initially agreed to a stock sale, but later changed their minds citing that a corporate entity can't be a shareholder in an s corp. A purchase of my stock would immediately trigger c corp status and then any switch to a pass-through entity (the entity of choice for their private equity group) like an llc would cause a liquidation and a tax burden for the buyer. So, at their request we switched back to an asset deal and agreed to treat it as a stock sale with regard to tax allocations and the passing through of the working capital. So the deal is presently an asset purchase, debt-free, cash-free, with the buyer assuming all working capital assets and payables (essentially, they're assuming the balance sheet, except for a few small revolving debt items and the company cash).Question #1 -Does the buyer's reasoning for avoiding a stock sale sound valid?Wouldn't the buyers have little or no tax burden in the "liquidation", since they'd have tax basis equal to the purchase price of the s-corp, and so a switch from the resultant c corp to the llc would only cost filing fees and such, since there would be no significant valuation difference between the two entities?Question #2 - What is usually favorable to the seller: a) a stock sale whereby the buyer assumes the existing entity for the purchase of the shareholder's stock (cash & debt free) or b) an asset sale, whereby the transaction is treated as stock sale for tax purposes and the buyer assumes the working capital, free of cash & debt (as described above), with the seller retaining the now empty company shell that would be wound down. Or, are they essentially the same to the buyer from a tax and liability perspective? In other words, will my net proceeds change materially from one case to the other?Addendum to Question #1 - Is it possible for me to switch the NJ S Corp to an LLC prior to the sale, so that the buyers could engage in a stock sale. Would that simply cause the liquidation and potential tax burden for me prior to the sale? Could I use an 'asset valuation' for the entity switch, which might even cause my valuation to be lower than at the s corps inception, to avoid an immediate tax burden during the switchover to an LLC? And, could an LLC have a corporate shareholder (i.e. the private equity group) ?

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Richard

Owner

Doctoral Degree

47,966 satisfied customers
Is it the exception or the rule that a public trading company

Is it the exception or the rule that a public trading company with no financials subject to shareholders or SEC accounting, that they receive private investment dollars with ie"Venture Capital investment monies"??Thanks

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Richard - Bizlaw

Juris Doctor

10,268 satisfied customers
In do not know which category this falls into -

In do not know which category this falls into - it regards XXXXX XXXXX in the U.S. Apparently my shares are "restricted" and I am unable to sell them until I get these "restrictions" lifted. I have been given Department of Securities Trading in XXXXXXXXX X.X. XXX XXX XXXX XXXXX, XXXXXXXX, XXXXXXXXX X.X. XXXXX Phone: XXX XXX XXX XXXX Fax: XXX-XXX XXX XXXX email:[email protected] [email protected] Is this true? Do I have to pay for these restrictions to be lifted? Is this Department of Securities Trading a government organisation? Regards XXXXX XXXXX

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Irwin Law

Juris Doctor JD

9,160 satisfied customers
I owned a construction company (LLC) which closed in Oct. 2012

I owned a construction company (LLC) which closed in Oct. 2012 because we went broke. At the time I closed the business we had all jobs completed. I was served papers two weeks ago that listed my company and myself as defendants in a suit by a previous customer seeking damages for "unfinished" work and a host of other items amounting to $50k. I have been unemployed since October and working temp labor jobs (about 30 hrs per wk) for income as I seek full time employment. My wife works part time, we have applied to the county for Economic Assistance, our truck was repo'd in October, our mortgage is 60 days past due...and there is no way I can afford an attorney to represent the business and myself in this case. I have 20 days ( now about 7 days) to respond, which I haven't yet. I don't want to have a judgement against me ( I believe the claims are all false) but can't do this on my own. I need help. Any suggestions?Jeff

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Ely

Counselor at Law

Juris Doctor

66,180 satisfied customers
what does this mean?AC Buy (date) 271 1,000.ooooDA Sell

what does this mean? AC Buy (date) 271 1,000.oooo DA Sell (date) 271 1,000.oooo units disposed 1000.0000 Is UNG just stock?what is the title FBO stand for when it preceeds a name then "roth ira"?

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Irwin Law

Juris Doctor JD

9,160 satisfied customers
Hi there- I won a judgement in09 for $10500, we had an agreement

Hi there-I won a judgement in'09 for $10500, we had an agreement for $250 month payments, the person did pay the last few years and paid $7500 off, and then she dragged me on the last three months until i realized she has no intention to pay the remaining $3k. So yesterday i filed a writ and have the sheriff's delivering it to her bank. My question is, i dont know if she has any money there, if she does, can you let me know how long the writ takes to come to completion or how i find out if the bank did have anything there, and then second, if she doesnt have any money there..can i do a sheriffs sale for the remainder?...thanks!

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Law Pro

Doctoral Degree

23,546 satisfied customers
Lets say a bank agrees to lend me money to buy some illiquid

Let's say a bank agrees to lend me money to buy some illiquid dividend paying securities or bonds. Let's say they trade on the pink sheets. Can the bank and I agree to value the assets at a reasonable price based on the business and cash flows and ignore the market price. Or do we have to mark them to market and treat this like a margin loan. Obviously I don't want to get margin calls because some retail invest dumps 50 shares at 50 cents on the dollar on the pinks and the bank doesn't want to have to do that either as long as the underlying company has not defaulted or deteriorated in credit quality.

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38,498 satisfied customers
Hello, I have ownership internest in a company that does alot

Hello, I have ownership internest in a company that does alot business with my employer in Georgia. I have not disclosed my potential conflict of interest to them. I am a majority owner of the corporI do NOT have any signing authority to enter into agreements or ability to make payments to them. I am ONLY able to make recommendations. My question is is this considered illegal? All services are at fair market price and again I do not sign any payments to the vendor.Does this situation violate any laws? If I disclose the relationship I believe that they will terminate. What advice can you give?

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JBaxLaw

Attorney

Doctoral Degree

9,260 satisfied customers
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