How do I give 50% of the stock in a corporation to my sister? Do I need to hire a lawyer to do this?

Question

How do I give 50% of the stock in a corporation to my sister? Do I need to hire a lawyer to do this?

Answer 1

For unissued authorized shares, she must make a written offer to purchase the stock at at fair market price, and the board of directors has to approve the sale.

The board may compensate her with stock for some service or product.

It MUST be in exchange for something, and of fair value for the stock.

If the stock is owned by you (Issued shares), instead of unissued authorized shares, then YOU can give it to her.

Either way, it must be in the corporate minutes and the corporate secretary records it in the stock transfer book.

Any stock she receives for less than the actual value, is income to the IRS.

And you need to determine what 50% is. If it is 50% of the issued shares, then she has 50% control over the corporation in shareholder meetings, and can deadlock you on every issue. Consider only letting her have only 49%.

Answer 2

Generally speaking I agree with "Feeling Mutual"  However, the corporate bylaws of the corporation will shed light on the issue.  Also, publicly traded corporations have to adhere to fed regulations that usually make it easier. http://www.wizatbiz.com