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Shareholders may only be individuals, certain trusts, estates, and certain exempt organizations (such as a 501(c)(3) nonprofit). Shareholders may not be partnerships or corporations. Shareholders must be US citizens or residents. The business may have no more than 100 shareholders.
The best thing to own the shares in a corporate beneficiary is actually another, separate discretionary trust. That means when we pay the dividends from the company, they fall to the asset trust, then the trustees of the asset trust can allocate the dividends to the family members who pay the least amount of tax.
Massachusetts trusts (also known as common-law trusts, business trusts, or unincorporated business organizations) are a unique type of trust used by individuals to run a business outside the normal legal entities such as a corporation or partnership.
In general, living trusts and testamentary trusts may hold S corporation stock only for two (2) years after the date of death of the grantor. After death, the trusts become ineligible shareholders and the corporation will lose its S-election due to the Grantor's death.
There are several types of financial assets that can be owned by a trust, including: Bonds and stock certificates. Shareholders stock from closely held corporations. Non-retirement brokerage and mutual fund accounts.
Corporations. If you own stock or shares in a corporation, you should contact the corporation and fill out any necessary documents to transfer your stock or shares to a trust. Often this document is called an ?Assignment of Stock?. Submit this document to the corporation and have them file it.