Inheriting shares of an S-corp

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Freeadvice
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Inheriting shares of an S-corp

Post by Freeadvice »

A family member has a 1/3 share in our s-corp. They drew up a partnership agreement leaving the 1/3 share to us. How are the shares transferred to us if we want to sell?
trustquestioner
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Re: Inheriting shares of an S-corp

Post by trustquestioner »

Well, there should be a shareholder agreement and a buy/sell.
bsteiner
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Re: Inheriting shares of an S-corp

Post by bsteiner »

Freeadvice wrote: Mon Jun 05, 2023 9:11 am A family member has a 1/3 share in our s-corp. They drew up a partnership agreement leaving the 1/3 share to us. How are the shares transferred to us if we want to sell?
The family member's executor would transfer the shares to you (regardless of whether you want to sell them). If you sell them, you would transfer the shares to the buyer.
hachiko
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Re: Inheriting shares of an S-corp

Post by hachiko »

When you say "our S Corp" do you mean that you were also a shareholder prior to this?
Made money. Lost money. Learned to stop counting.
Lastrun
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Re: Inheriting shares of an S-corp

Post by Lastrun »

Freeadvice wrote: Mon Jun 05, 2023 9:11 am They drew up a partnership agreement leaving the 1/3 share to us.
Some states allow TOD beneficiary designations of shares, so double check on this, it may not be a probate asset.
Topic Author
Freeadvice
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Re: Inheriting shares of an S-corp

Post by Freeadvice »

bsteiner wrote: Mon Jun 05, 2023 9:34 am
Freeadvice wrote: Mon Jun 05, 2023 9:11 am A family member has a 1/3 share in our s-corp. They drew up a partnership agreement leaving the 1/3 share to us. How are the shares transferred to us if we want to sell?
The family member's executor would transfer the shares to you (regardless of whether you want to sell them). If you sell them, you would transfer the shares to the buyer.
Thanks BSteiner. I was hoping to not have to go through the estate. Will NY accept the partnership agreement? How is ownership of the shares transferred? Is a death certificate presented to someone?
Topic Author
Freeadvice
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Re: Inheriting shares of an S-corp

Post by Freeadvice »

Lastrun wrote: Mon Jun 05, 2023 9:56 am
Freeadvice wrote: Mon Jun 05, 2023 9:11 am They drew up a partnership agreement leaving the 1/3 share to us.
Some states allow TOD beneficiary designations of shares, so double check on this, it may not be a probate asset.
I sure hope so! It’s in NYState.
Topic Author
Freeadvice
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Re: Inheriting shares of an S-corp

Post by Freeadvice »

hachiko wrote: Mon Jun 05, 2023 9:49 am When you say "our S Corp" do you mean that you were also a shareholder prior to this?
Yes. Majority shareholder.
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Freeadvice
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Re: Inheriting shares of an S-corp

Post by Freeadvice »

Does NYS allow transfer on death of shares in a business if there is a partnership agreement stating shares go to the beneficiary? How/where is this recorded?
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