How to Transfer an Incorporated Business to a Spouse
- 1). Consult your corporation's Buy/Sell Agreement if one exists. Though your spouse is not technically "buying" your corporation, a Buy/Sell Agreement covers any transfer of ownership. The agreement may set forth restrictions on transferring stock, such as requiring the approval of other owners. You must comply with the terms of your agreement.
- 2). Confirm the laws of your state regarding business transfers. Some states place limitations on the transfer of stock within closely held corporations, such as only allowing transfers if the original owner has possessed the stock for a predetermined length of time.
- 3). Amend the corporation's stock records to reflect the new owner. Because the transfer is without payment and between spouses, your contributed capital in the corporation's account can be transferred directly to your spouse without any formal procedures.
- 4). Transfer ownership--whether physically or symbolically--of the stocks to your spouse. If you have paper copies to prove stock ownership, give them to your spouse. This transfer does not trigger any tax liability for either you or your spouse as it is an interfamilial transfer.
- 5). Update your records with your state's Chamber of Commerce if you are the current registered agent of the corporation and wish to transfer this responsibility to your spouse. The agent is the person in whom the right to represent the corporation to the state is vested. Even if you are no longer an owner, you can retain agency rights if you still want to play a role in the corporation.
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