Search CompleteMarkets

...ulting agreements, and/or straight stock redemptions. One method, however, has...s money to repurchase or purchase the stock and can deduct only the interest (...

...majority shareholders, or even the stock of the minority owners, unless there ... purchase, deferred compensation, and stock redemption. Oak & Associates assists client...

... and Bill Schoeffler Most agency owners do not have a structured plan to perpetuate their lifetime's work-the firm. It would be safe to say that at least 90% of independent agencies or brokerages have not defined a strategy to buy out the majority shareholders, or even the stock of the minority owners, unless there is death or disability. In the event of death or disability, most firms have a buy/sell agreement funded by Life insurance to finance the corporation's buyout of the owner's stock. Retirement is sometimes addressed in the buy ... vested ownership for all employees the sellers' ability to roll over their proceeds tax free if invested in marketable securities (if at least 30% of the stock is sold) Other internal perpetuation alternatives exist, including gifting, employee purchase, deferred compensation, and stock redemption. Oak & Associates assists clients with a cash-flow analysis of the available alternatives and valuations. If you're not ready to establish your perpetuation plan today, at least have a contingent buy/sell agreement with a friendly, respected competitor down the street in case the ... happens. The best time to establish a perpetuation plan is while the owners are still young. We recommend that owners also establish an annual business plan; the improvement in overall productivity and profitability will maximize the value of the firm. Owners can't afford to wait if they want to plan the perpetuation process properly. Catherine C. Oak, CIC, AAI and Bill Schoeffler can be reached at Oak & Associates, P.O. Box 2047, Glen Ellen, CA 95442, (707) 935-6565, fax (707) 935-6515, ...

... seller at least $244,000 more than a C' corporation by eliminating double taxation on the sale. 2c. Simplified Example, Sale to an Insider: Sale to an insider who already owns a large part of the agency will typically be structured as a stock sale rather than an asset sale. A $1 million stock sale will allow the buyer of an S' corporation eventually to save more than $280,000 in future capital gains tax-because the sale may be structured as a cross purchase instead of a stock ... . 3. The rules restricting S' corporations were improved in late 1996. Unfortunately, most agency owners (and many advisors) focus only on an agency's yearly taxation. Obviously this matters, but the tax dollars saved each year, if any, are usually much smaller than the tax dollars that can be saved (or lost) when the agency is sold. In our experience, most agency owners are completely unaware of the major importance S' vs. C' status carries when an agency is sold. Some of ... an S' corporation, especially for smaller agencies. At most, the income tax savings will be a little more than $17,000 per year (but usually the savings will be substantially less) . 1b. Fringe benefits for owners (such as Medical insurance) get better deductibility with C' corporations. This difference is gradually being phased out. 1c. Social Security taxes for owners, particularly Medicare taxes, are often lower with S' corporations than C' corporations. When the agency is eventually sold, capital ...

... will typically be structured as a stock sale rather than an asset sale. A $1 million stock sale will allow the buyer of an 'S' c... can deduct all the owner's Medical insurance, and 'S' corporations cannot. 'S...

... buyout period. Holding the agency stock as collateral is not enough if that stock subsequently becomes worthless. ...without having to borrow any funds. Insurance agencies can accumulate up to $2...

... as EXHIBIT A to be known as COLORFUL INSURANCE SERVICES, INC., hereinafter referred to as CIS. 2.2 The By-Laws of CIS shall be in the form of EXHIBIT B annexed hereto. 2.3 Each Party shall subscribe to and purchase the number of shares of common voting stock of CIS as set forth on EXHIBIT C annexed hereto and shall pay the subscription price upon demand by CIS. 2.4 No Party shall sell, give, bequeath, convey, hypothecate, pledge or in any manner transfer ownership of or encumber any or all of ... agreement calling for the acquisition of all outstanding shares of stock of the corporate Parties from each and all of its shareholders at such time as a shareholder shall no longer be an active, full time employee of such corporate Party whether such acquisition be by way of a redemption of stock by the corporate Party or by purchase by other existing shareholders, but by no others. 5.10 No Party is subject to any binding agreement, restriction or impediment to entering into and carrying out the terms and conditions hereof without penalty. 5.11 Each corporate ... Bakst This content has not been rated yet. SPECIMEN CLUSTER AGREEMENT Prepared By: DAVID A. BAKST, ESQUIRE MORRISON, MAHONEY & MILLER AGREEMENT made and entered into this __ day of ___, 19_, by and among the following Parties: A. RED INSURANCE AGENCY, INC., a Massachusetts corporation, having a principal place of business in Boston, Massachusetts; B. WHITE INSURANCE AGENCY, INC., a Massachusetts corporation, having a principal place of business in Boston, Massachusetts; C. BLUE INSURANCE AGENCY ...

... number of shares of common voting stock of CIS as set forth on EXHIBIT C anne...al a policy of errors and omissions insurance with limits of liability of $1 m...

Valuing Your Company Stock When Owned By An ESOP
VALUING YOUR COMPANY STOCK WHEN OWNED BY AN ESOP by Irving Blac...kes in dealing in the ESOP's employer stock. In many cases, the trustee is somehow affiliated (stockholder, officer, employee) with the...

... Universal Life provides all the benefits of Universal Life, with one addition: This product allows the client to choose from a number of investment options, with transfers among options allowed each year. Companies offer from three to eight investment options, including money market, common stock, long-term and government securities, and bonds, allowing the client to match his or her own investment objectives. The slightly higher risk involved in this type of Universal Life can also mean higher-than-average returns. Mortgage Universal Life-This policy outperforms traditional Term Mortgage insurance policies in ... plans, executive bonus plans, and retirement income split-dollar plans. The business owner is provided with a growing emergency cash reserve, retirement income, and income to the family when death occurs. Universal Life insurance can also be used in Key-Person Life coverage, corporate stock redemption plans, and buy-sell agreements. Young couples, singles, and single parents: They're starting to establish themselves and need Life insurance. They'd also like a chance to make some investments. Universal Life combines the two, in addition to offering favorable tax treatment. ... thousands of articles, checklists, tip sheets, sales letters, and more! Communications Marketing Customer Service Planning Finance/Accounting Risk Management Human Resources Selling Legal and E&O Technology Life/Financial Services Glossaries Management Resources & Links Categories Popular Recent All Back Universal Life Insurance: Module V-E 4/30/2013 10:40:32 PM by CompleteMarkets Editor This content has not been rated yet. &# 160 UNIVERSAL LIFE INSURANCE: MODULE V-E &# 160 OVERVIEW Universal Life was created in the early 1980s at a time ...