Employee stock ownership plans (ESOPs) provide tax-saving opportunities for business owners who want to exit the business and are committed to employee ownership. A business valuation is the first step to determining whether this option makes sense for you. How ESOPs Save Taxes Business owners typically qualify for the current maximum 20 percent maximum federal rate on  Continue Reading »

An earnout provision is a contractual arrangement in which the seller receives additional payment in the future if certain financial goals are met, and if you are selling a business, the buyer may want to pay part of the price this way. Basically, part of the price is contingent on the performance of the company  Continue Reading »

Do you remember your first summer job? Whatever your first job may have been, it taught valuable lessons about responsibility and balancing work with family and friends. It also helped keep you out of trouble during the summer, instilled confidence and built up your resume. Unfortunately, there are not enough summer jobs available to meet the  Continue Reading »

LongPath Capital, LLC v. Ramtron International Corp., 2015 Del. Ch. LEXIS 177 (June 30, 2015) The Delaware Court of Chancery was a hive of activity during summer 2015. In two months, the court issued a number of key valuation decisions—all long and deep. The following statutory appraisal ruling falls in line with a suite of  Continue Reading »

Employment statistics ended 2015 on a positive note, and many businesses are planning to hire new employees this year. In addition, roughly 242,000 new jobs were added in February and the unemployment rate fell to 4.9%, its lowest level in eight years. Several recent studies indicate that the hiring momentum will continue in 2016. In Maine,  Continue Reading »

The IRS must learn in-house terminology being used by the business when they begin auditing or examining, as well as how the business maintains their records. In the case of executive compensation, the IRS is especially interested in arrangements in which the company deducts the high salary of one of its top executives using an  Continue Reading »

When purported loan payments are recast as corporate distributions to shareholders, there can be negative tax consequences. The courts, in some cases, have ruled that withdrawals from two closely held corporations were constructive corporate distributions rather than loan proceeds and repayments. As such, the withdrawals triggered taxable dividends and capital gains for the shareholders. Corporate Distribution  Continue Reading »

Because of their advantageous tax-free treatment, structured settlements are typically associated with the payment of personal injury damages. However, some business purchases and buyouts can also benefit from structured settlements using annuity payments from an insurance company. While payments from these non-personal injury cases are not tax-exempt, the recipient only owes taxes on the amount of  Continue Reading »

When faced with the choice of leasing certain assets instead of buying them outright, many companies are choosing to lease. These arrangements are especially common among construction contractors, manufacturers, retailers, health care providers, airlines and trucking companies that rely on expensive equipment or real estate in their day-to-day operations. According to estimates made by the  Continue Reading »

Maine business owners are often surprised when they receive their valuation report from a hired appraiser. Often times the expert is hired to determine the fair market value of a business interest for, say, divorce or gift and estate tax purposes, and the client wonders, “Is this all I would receive if I were to  Continue Reading »