Since we launched the Center for Private Company Excellence in May 2012, we have written nearly 60 blog posts. And as our readership has grown over that time, we've noticed several posts that have been particularly popular with our readers.
Here are the top five posts from the Center for Private Company Excellence blog since our launch:
1. Why issuing stock to employees isn't always such a good idea
Business owners will often offer their employees—key or otherwise—shares of stock in the company. This is typically done in lieu of additional cash compensation, to motivate behavior changes, to reward employees for their part in creating value, or for retention purposes. Employees often desire stock ownership to feel part of the organization and to be rewarded both short- and long-term for their efforts. Although issuing stock to employees can sometimes accomplish these goals, the process is full of pitfalls and unintended consequences—for employers and employees.
2. Should I consider changing my business to a C corporation?
With the legislative fiscal cliff activities behind us and higher income tax burdens now clearly defined for wealthier Americans, some business owners are challenging the foundation of the tax structure for their business operations. The resulting question: Would I be better off changing to a C corporation?
3. The family bank - a legacy alternative
In a family bank, the senior generation typically uses some of the wealth they have accumulated from their family business to set up the “bank.” The bank can then, in turn, lend money to family members based on predetermined criteria such as starting a new business, buying ownership in the existing family business, going to college, or purchasing a home. The family bank concept can provide ways for the senior generation to share their wealth other than through direct inheritance.
4. 3 tips to avoid conflict over distributions in a family business
Many family businesses have shareholders who work directly inside the business (insiders) as well as shareholders who do not work in the business at all (outsiders). When a family business has both “inside” and “outside” ownership, it can lead to conflict over what is considered the best use of the profits. Insiders tend to want to reinvest the dollars into the business for growth and new opportunities, while outsiders tend to want a continued yield on their ownership.
5. The hidden tax cost of stock redemptions in private company transfers
Business owners are often advised to redeem their stock in the company when transferring ownership. Redemptions are used for many reasons and are in many cases the necessary form to affect a transfer of shares. There are situations, however, when pursuing other options can save substantial amounts of income taxes by doing some thoughtful planning.
Are there any topics you'd like to see featured in upcoming blog posts? Share in the comments.