North Tonawanda, NY asked in Business Law and Contracts for New York

Q: My friend has an S Corp that has 0 earning. He wants to sell me half of the shares. Do we need a contract drawn up?

This is for a collection agency. The business has not been up and running yet. So no money in and no money out. We’ve just gotten everything set up now. Also If there are no earnings does it matter if he only charges me a penny per stock?

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3 Lawyer Answers
Inna Fershteyn
Inna Fershteyn
Answered
  • Brooklyn, NY
  • Licensed in New York

A: What's the purchase price? "0". What about liabilities is he taken them over too?

You need a consultation with Corproate attorney before you proceed. May not need a contract but definitely need to understand what you are doing

Sincerely,

Inna Fershteyn

Law Office of Inna Fershteyn and Associates, P.C.

1517 Voorhies Ave, Suite 400

Brooklyn, NY 11235

tel: 718-333-2394

fax: 718-701-8859

www.BrooklynTrustandWill.com

Barry E. Janay agrees with this answer

7 users found this answer helpful

Michael David Siegel
Michael David Siegel
Answered
  • New York, NY
  • Licensed in New York

A: It is not required but it is good to have an agreement that discusses certain issues for the future, like if the shares can be sold, what happens on death, etc.

Barry E. Janay agrees with this answer

Barry E. Janay
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Answered
  • Livingston, NJ
  • Licensed in New York

A: Caveat emptor, let the buyer beware. Best to do adequate due diligence, which if you haven't done a transaction like this before (which it sounds like you haven't) getting someone to review things with you can be the ounce of prevention that avoids having to pay a pound of cure later on.

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