I am working with a small company, where 2 shareholders are looking to buy all existing shares of a 3rd and for that person to fully exit all involvement with the business. Due to cash considerations, it is likely to be a deferred purchase, and I wonder if anyone has any guidance they could offer regarding the tax conseuqences of this transaction for either the company (if it were to purchase its own shares) or for the two remaining shareholders if they bought them. I can see that any share purchase agreement that might be used or negotiated, could create a future tax consequence for them, in any future similar sale they entered into, to leave the business themselves, but am less clear what, if any, the consequences of this present planned transaction might be for them or their company. All thoughts gratefully welcomed!
19th Oct 2021
Tax re purchase of shares
What, if any are the tax consequences of shareholders buying out a 3rd existing shareholder?
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