Purchasing a business in North Carolina can be a lucrative and exciting opportunity, but it also comes with a web of legal, financial, and operational risks. One of the most significant, and overlooked, risks is that of successor employer liability. This risk is particularly relevant when the seller has engaged in employee misclassification, treating workers as independent contractors (1099) when the law requires them to be classified as employees (W-2).

Multi-step transactions in mergers and acquisitions are not just strategic maneuvers for operational integration-they are also critical tools for optimizing tax outcomes. These structures, which unfold across phased legal and financial steps, create unique opportunities and challenges for buyers, sellers, and their advisors.

IRC Section 704(c) is a critical provision of the Internal Revenue Code that addresses how partnerships must allocate income, gain, loss, and deduction with respect to property contributed by partners. The fundamental purpose of Section 704(c) is to prevent the shifting of tax consequences among partners with respect to precontribution gain or loss.

Tag along rights are crucial contractual protections designed to safeguard minority shareholders in private companies. These rights ensure that if majority shareholders decide to sell their stake, minority holders can “tag along” and sell their shares on the same terms and conditions.

A frequent misunderstanding is that “LLCs cannot own S corporations.” In reality, the rule is that entities taxed as partnerships or corporations cannot be S corporation shareholders. A single-member LLC, if disregarded for tax purposes and owned by an individual or other eligible person, is not treated as a separate entity and thus does not violate the rule.

IRC Section 721 is a provision in the U.S. Internal Revenue Code that governs the tax treatment of property contributed to a partnership in exchange for an interest in that partnership.

Phantom employee fraud is a serious threat to organizations of all sizes, with profound legal, tax, and governance consequences. Whether perpetrated by a rogue executive or a business owner seeking to enrich family members, these schemes can result in criminal prosecution, civil liability, tax penalties, and lasting reputational damage.

DEXIT showing to be a possible exodus of US corporations from the once business friendly State of Delaware.

Limited partnerships in North Carolina offer a flexible business structure where there are two types of partners

Navigating the world of business partnership agreements

Differences in North Carolina partnerships - which one is right for you?