We have profitable private company and I want to grant shares to key employees?

Question

Our Accounts suggesting a very expensive valuation and then gifting or transferring the shares

What is the best way to do this ?

Answer 1

Assuming you are in the United States are you an S-corporation or a C-corporation?

If an S-corporation have your lawyer or CPA explain the rules for filing as an S-corp and make sure that your granting shares will not result in adding so many shareholders that you lose the ability to file as an S-corp

Regardless of which type of corporation you have you should  have your lawyer draw up a model agreement you can use that assures that you can reacquire the stock if the employee leaves your company.

Hope this helps

Jerry-the-bookkeeper