What to expect from a Stock Sale
BEFORE you complete a Stock Sale, you must be aware of two important points:
- Be sure to email Carlos Martinez at least ONE WEEK BEFORE the Stock Sale closing date (at cmartinez@benetrends.com). This step is crucial, because we must know the net sale price in advance.
- There are 2 line items that you must ensure are added to the Stock Sale contract before you sign it. Without these line items, we will not be allowed to speak with you once the stock sale is completed. Instead, we would be required to deal exclusively with the buyer. In our experience, most buyers don’t want to be involved with the plan or the plan termination. Here are examples of the 2 line items:
- Due to the Stock Sale, the “Plan” is to receive $[fill in amount].
- Regardless of the Stock Sale, [name of Plan Administrator] will remain responsible for the “Plan”, the termination of the “Plan”, and any future audits on the “Plan”.
We will provide you with the exact wording and placement of the line items you need to add.
Advantage of a Stock Sale
In a stock sale the seller is the shareholder(s), not the C-Corporation. By finding a buyer who is willing to complete a stock sale, you will not have to worry about paying corporate taxes.
As long as the buyer is not related to you and not a current employee of the business, you are free to determine the sale price.
What happens in a Stock Sale
To find out what to expect in the sale and termination process, download this handy step-by-step checklist.