Company owners face many decisions when it comes time to transition responsibilities and ultimately ownership to the next generation. For those owners who wish to sell their shares gradually and transition out of their responsibilities over a period of years, an Employee Stock Ownership Plan (ESOP) might be the right fit. An ESOP is a qualified defined contribution employee benefit plan that primarily holds the employer company’s stock. An ESOP functions similarly to a stock bonus plan that provides a retirement benefit to employees in the form of the company’s stock. As a “qualified” plan, an ESOP is established by the employer for the benefit of the company’s employees and qualifies for certain tax benefits, both for the company and the selling owners. (more…)
Earlier this year we wrote about the looming regulations affecting valuation discounts under the IRS Proposed Section 2704 Regulations. The proposed regulations would have curbed valuation discounts, resulting in increased estate taxes on the deaths of owners of family businesses.
The Treasury, after extensive deliberation in furtherance of the policies stated in Executive Order 13789, decided to withdraw these regulations entirely for the following reasons: (more…)
The recent reports by PitchBook and the Silicon Valley Business Journal indicate that 2017 will be a healthy year for Venture Capitalists. Experts believe that the Venture Capital (VC) industry is coming back to “normal” levels after the boom of activity in 2015.
Interestingly, there was a lot of talk recently about the VC funding cooldown which raised concern about the Series A funding crunch. The recently published 1Q 2017 PitchBook report confirms that angel and seed financing continued to decline in 2017, and it is getting more difficult to secure Series A financing. In fact, first-financing activities have been falling since the middle of 2015. (more…)
Generally, most companies understand what a 409A Valuation is and why they need it, but questions commonly arise regarding the timing and subsequent updates of their 409A Valuation. Not all of these questions have clear cut answers and ASL prides itself in helping our clients navigate these “gray areas” of 409A Valuations.
409A Valuations – Frequently Asked Questions
Here are some commonly asked questions: (more…)