Hello, everyone!
Ok, I hope I explain this right: I've started an S-Corp in North Carolina. I am the President and only shareholder. The S-Corp application required me to specify a number of shares. I specified 1,500. Then apparently, I need to take ownership of these shares (if I understand correctly), and I need to specify a price per share. So essentially, I as the president, am selling the shares to myself, and the proceeds go to my company.
First, am I understanding that correctly? Secondly, will the company be taxed on the proceeds of the sale of these shares to myself? If the proceeds are taxable, I should define a very low price for the shares, right? Otherwise, I don't mind defining a higher price since the money will just go to fund the company's activities.
Thank you!
Ok, I hope I explain this right: I've started an S-Corp in North Carolina. I am the President and only shareholder. The S-Corp application required me to specify a number of shares. I specified 1,500. Then apparently, I need to take ownership of these shares (if I understand correctly), and I need to specify a price per share. So essentially, I as the president, am selling the shares to myself, and the proceeds go to my company.
First, am I understanding that correctly? Secondly, will the company be taxed on the proceeds of the sale of these shares to myself? If the proceeds are taxable, I should define a very low price for the shares, right? Otherwise, I don't mind defining a higher price since the money will just go to fund the company's activities.
Thank you!
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