Search CompleteMarkets

...ial transactions, especially with initial public offerings (IPOs). The dot-coms are th...dents that aren't ready. My foray into IPOs, demutualizations, and megafinanci...

...ost onerous rules applied only to initial public offerings (IPOs), so this issue might now be mostly s...

... protected, this is not likely to be a problem for an adequately insured agency. Securities Issues: The securities exposure can also be reduced. A Supreme Court decision, Gustafson v. Alloyd Co. Inc., held that the most onerous rules applied only to initial public offerings (IPOs), so this issue might now be mostly solved. However, to be on the safe side, we'd recommend these steps: First, instead of litigating securities issues, require them to be submitted to binding arbitration (as permitted by ... Supreme Court decision) . This alone should be enough to return sanity to future disputes. Also, require each side to acknowledge responsibility for its own due diligence, and sell only to a knowledgeable buyer. If the seller has any adverse information, be sure to disclose it. Buyer Deductibility: Although a stock sale will not be deductible to the buyer, the tax savings to the seller are so substantial that they can be shared with the buyer to make both buyer and seller come out ahead. In addition, there are ... number of other techniques for creating deductibility in a stock sale. Any portion which cannot be deducted will establish "basis" in the stock for the buyer, which will reduce the buyer's future capital gains tax. EXAMPLE A good way to see just how substantial these tax differences can be is to look at a hypothetical example that could easily apply to most agency sellers. ASSET SALE "C " Corporation Agency Sale Price: $1 million Corporate Income Tax @ 34% -340,000 Paid to Seller $660,000 Personal ...