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Ask a Lawyer -- Corporations
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Brought to you by MedLawPlus.com®-- Corporate Bylaws and initial board of directors resolution Price: $14.99 (free trial) |
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Question: My client owns an s-corp and wants to transfer 25% ownership to his spouse. Can he just gift shares to her and what are the mechanics? Does he need a lawyer, if not what forms are needed? Response: Can he gift his wife the shares? Yes. What are the mechanics. Let's assume 25% of the outstanding stock is 250 shares. The appropriate corporate officer (designated in bylaws, usually the corporate secretary) would retire the old corporation share certificate for 250 shares in his name and execute a new share certificate for 250 shares in her name. The certificates usually have stubs upon which these transfers and dates are noted. Here is a link to an online stationary store that sells blank stock certificates. I'd also keep a corporate stock transfer ledger which is basically a spread sheet showing the date of each stock transfer, the share class (i.e., common), the number of shares, the transferee, the transferor, and the consideration paid. Whether you need a lawyer or not depends on whether on not your can figure out this process on your own. Typically, lawyers are not necessary for share transfers. Although not required, I would probably also prepare a memorandum from the husband detailing his intention to gift a specific number of shares of corporate stock to his wife. Then have him sign and date the memo (which you might call a "certificate of gift"). Submitted: 5-23-2007; Dan, PA Response: 6-10-2007; JJR Add A Comment |
Ask a Lawyer, Corporations Archives
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