Announcement

Collapse
No announcement yet.

S-Corp Shareholders Disagreement

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    S-Corp Shareholders Disagreement

    I need a little advice on what to do here as I have not encountered this situation before.

    I've got an S-Corp where one shareholder left. There is now disagreements going on in regards to various transactions in the S-Corp.

    Should I talk to the ex-shareholder about the S-Corp return?

    I would go into more details but this may become a bad situation if not already. I feel I only need to deal with the existing S-Corp shareholder. If she wants me to talk to the other one then I would need to get a privacy release.

    What do you all think?

    #2
    I'd saything along the lines of, "sorry, but if i cannot talk to both of you together I don't believe I can adequately prepare your return."

    Comment


      #3
      Originally posted by geekgirldany View Post

      I've got an S-Corp where one shareholder left. There is now disagreements going on in regards to various transactions in the S-Corp.

      Should I talk to the ex-shareholder about the S-Corp return?
      I only would talk to the other one in presence of the one you deal with, if this should be necessary.

      As far as the Corporation tax returns goes, I think the 2nd S/H has all right to talk to you and you to him without conflict of interest - but I would not talk to the second one separately.

      Comment


        #4
        So are you all saying that I should talk to both of them at the same time in regards to the S-Corp return? One has already made it clear that she would talk to me but not to the other shareholder.

        I just don't want to get in the middle.

        The return is already prepared and ready to go.

        Comment


          #5
          see your e-mail

          Comment


            #6
            got it thanks

            Comment


              #7
              Is your client the majority shareholder? If so, the return is prepared on the basis
              on information presented by same.

              If the other shareholder is/was a minor shareholder, it's no skin off your nose.

              The important point here is that a majority shareholder controls everything, NOT in his capacity
              as a shareholder of course, but as president/chairman of board, whatever. Only an officer of the
              corporation has authority to direct affairs of the corporation.

              But if it was a 50/50 deal, I see your concern, cause you might not know who has control. Best to
              get copies of last board of directors' meeting.
              ChEAr$,
              Harlan Lunsford, EA n LA

              Comment


                #8
                Thanks so much for posting. Actually it was 55/45 with current shareholder being the majority.

                I don't even think there have been minutes or meetings recorded.

                Comment


                  #9
                  55/45 solves your problem. Deal only with mr 55.
                  ChEAr$,
                  Harlan Lunsford, EA n LA

                  Comment


                    #10
                    Cannot just "Leave"

                    Dany, a shareholder cannot just "leave." Of course, he may physically do so, or just simply fail to show up, but there has to be a disposition of his shares. If he does nothing, your state law probably determines what happens to his existing shares.

                    But "leaving" will be a financial event, with possible ramifications on the K-1.

                    Comment

                    Working...
                    X