86 Freeze

What is the process in adding family members as shareholders in my company?

Many re-organizations start with what is called a Section 86 freeze. This is a process by which the current owner(s) value is frozen at a certain point of time and the future growth of the company is then sold for nominal consideration to other family members such as spouses and children. There are a number of tax issues that must be taken into account but when done carefully the result is new owners (including the original owner(s) may now participate in the profits of the company by way of dividends which may be shared (subject to certain conditions) amongst the new owners.

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