Legal Question in Business Law in Maryland

I am currently 51% majority owner of a General Construction women owned minority small business corporation. I would like to sell my shares back to the previous owner, whom i bought my 51% ownership for $1.00. Currently, the business relationship is not working out or generating profits and the previous owner would like to buy back the company. We only had a buy sell agreement and a certificate of stock. I would like to know the legal steps in reselling my shares back to previous owner. It's a family business, and since the business has no profits, i would just sell it back right out.


Asked on 4/21/14, 2:26 pm

2 Answers from Attorneys

Cedulie Laumann Arden Law Firm, LLC

Selling back ownership interests will be affected by several things, including your basis in the entity, the value of the entity (regardless of whether the business is currently generating profits) and the bylaws (assuming they exist). (If these were not exempt from securities registration a host of other requirements would come into play).

By way of general information, shares are transferred by simply endorsing the shares (the same way one would sign over any other title document). The parties may need to file a gift tax return depending on the company value. That does not fully detail the tax and other ramifications which require specific advice from your attorney / accountant / tax advisor.

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Answered on 4/21/14, 4:54 pm
Robert Beatson, II Law Offices of Robert Beatson, II

There are a number of business and tax variables and fact-specific issues that need to be carefully worked through to properly sell your ownership interest in the business under Federal and MD law, protect the business assets, provide limited liability protection for the business owners/participants, etc. An experienced business law/tax attorney should be able to handle this under Federal and MD law. Please note that my legal services are available only with a signed engagement agreement in accordance with the Maryland Rules of Professional Conduct applicable to attorneys licensed in the state of MD. If I can be of any help to you, contact my offices as I would be pleased to provide legal/tax support. Sincerely, Robert Beatson II; 4-22-2014, 2:00 p.m. EST Law Offices of Robert Beatson, II 9818 Glynshire Way Potomac, MD 20854 Email: rbeatsonatty@netscape.net Website: www.beatsonlaw.com Licensed to practice law in DC, MD, VA, and NY.

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Answered on 4/22/14, 11:04 am


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