Malleo Financial Services

Michael A. Malleo 

Phone: 201-321-7041

mike@malleofinancialservices.com

 

Terms of Notarial Acts:

Acknowledgement – Certifying that a signer personally appeared before the Notary, was identified by the Notary, and acknowledged freely signing a document.

 

Malleo Financial Services is a proud member of ALTA (American Land Title Association), the American Society of Notaries, and the National Notary Association (NNA). We're also a Fidelity National approved closer. 

 

FIDELITY APPROVED CLOSER
FIDELITY APPROVED CLOSER

 

*The opinions expressed on this website are strictly those of Malleo Financial Services, LLC and not those of ASH Brokerage Corp.., or any of our affiliates.

 

*Malleo Financial Services LLC cannot and

will not give any tax or legal advice.

 

Minority Interest Ownership & Business Retirement Plan

 

Laurel Cabinet Company has two shareholders: Stan Laurel, the company founder who holds 75 percent of the company stock, and Oliver Hardy, Stan’s brother-in-law, who invested in the business at its start and holds 25 percent of the company stock. Over the past 12 years their business has become very successful, but they’ve never considered what the cabinet company is really valued at and do not have a buy-sell agreement. Oliver’s major concern is that his retirement will be strongly tied to his ability to sell his share of the business at a fair price. 

 

Both Stan and Oliver agree to complete an informal business valuation. Stan and Oliver then enter into a “Cross-Purchase” buy-sell agreement, which guarantees a buyer for both parties in the event of death, disability or retirement. The share price is set per the valuation, and funding is guaranteed through both Disability Income insurance and Term Life insurance. Now, Oliver has peace of mind that he’ll be able to retire and receive a fair price for his share of the business. Stan is also confident that he’ll be able to purchase Oliver’s shares and retain control of the company. 

 

In order to help ensure a more secure retirement for both of them, Stan decided to establish a SEP-IRA. “SEP” stands for Simplified Employee Pension. All SEP contributions are made by Stan (through the company) for both himself and Oliver, and are tax deductible to the business. With a SEP-IRA, Stan has the option to increase, decrease, or even skip annual contributions depending the on profitability and cash flow of the business. 

 

For a free consultation, please contact us for an appointment.

 *This blog is strictly the opinion of Michael A. Malleo and not those of

ASH Brokerage Corp., Quest Capital Strategies, Inc., nor any of our affiliates.

 

Malleo Financial Services LLC cannot and will not give any specific tax or legal advice.

Please consult your tax professional or legal professional for such advice.