Foreign nationals in a nonimmigrant status and start-ups
Anyone who has hung around the tech community in Boston, knows that foreign nationals play a huge role in this ecosystem. So it is worth focusing on some of the issues that are particular to foreign nationals. Pritvi Tanwar of our firm has the following to say on this topic: The New England Area and Boston in particular, through its universities and companies, attracts outstanding talent from around the world. It is no surprise then that many international students and other nonimmigrants go on to found or be founding members of companies in and around the Route 128 area. Starting a company...
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Reverse Vesting and S Corporations
I recently ran into this interesting question: If you want to use reverse vesting and take advantage of 83(b) in an S Corporation what do you do about (1) tax distributions and (2) built up after tax profits? In the case of tax distributions, once the shares are issued, the holder will have to pay tax (to the extent that there are taxable profits) pro rata in accordance with his ownership. So, it seems logical that any distributions made to help stockholders pay this tax should also go to the holder of restricted stock on a pro rata basis. If they do not,...
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How to incorporate: "C" "S" or LLC?
To a large extent, but not exclusively, whether to be a “C” corporation or an “S” corporation or a limited liability company (and “LLC”) is a tax issue. LLCs and “S” corporations are so-called pass-through entities. That is to say that the entity itself is not taxable; its tax attributes (profits and losses) are passed through to the owners of the entity, and they pay tax in accordance with their particular tax situation (often at the highest marginal rate for individuals – assuming they are well-to-do). (Most LLCs and “S” corporations distribute cash to enable their owners to pay these owner-level taxes.) Distributions...
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