Because Massachusetts courts have been vigilant in protecting minority interests in closely held corporations
, the SJC should have afforded Joy more protection.
Chapter 4 contains a discussion of compensation planning in the closely held corporation
. The reasonable compensation standard is discussed.
Closely held corporations
and personal service corporations have different rules for establishing material participation.
In May 1982, a closely held corporation
("Debtor") and the claimant ("Claimant"), a charitable trust controlled by the Debtor's shareholders, officers and directors, entered into an agreement wherein the Debtor agreed to purchase preferred and common stock owned by the Claimant for approximately $650,000.
(108.) Perhaps a waiver would also alleviate concerns that banks will be reluctant to lend to closely held corporations
because the company might face an oppression-based buyout in the future and an accompanying cash drain.
The Supreme Court was reasoning in a similar vein when it ruled that the real people who run closely held corporations
should be able to exercise religious rights just as do individuals.
The value of equity-based compensation can be controversial, however, particularly when the executive is employed by a closely held corporation
. In addition to valuation issues, there may be income tax disputes related to the grant of equity-based compensation to the closely held corporation
Management Structure of Typical Closely Held Corporations
It is the tendency to analogize the closely held corporation
to a partnership which accounts for the Massachusetts approach that minority shareholders in closely held corporations
owe a fiduciary duty to their fellow shareholders.
Recent legislation has reduced the benefits available to executives under qualified employee benefit plans and, consequently, has made forms of nonqualified deferred compensation (NQDC) attractive to both public and closely held corporations
. NQDC arrangements provide additional benefits to recruit and retain executives and supply the flexibility needed to counteract the qualified plan limitations under the Tax Reform Act of 1986.
Topics include: the development of the estate plan; lifetime transfers; transfers at death; generation-skipping transfers; special planning considerations (e.g., community property, life insurance, charitable transfers, closely held corporations
); and post-mortem planning.
Hobby Lobby Stores Inc., that closely held corporations
are not obligated to pay for certain forms of birth control.