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GiftLaw Pro Home   >  Chapter 5 - Difficult Property Gifts  >  5.5 Prearranged Sales  >  5.5.3 C Corporation Business Sale  >  Basic Quiz

Basic Quiz - 5.5.3 C Corporation Business Sale

1. There are three specific time frames for the sale of a C corporation.
           
2. For sales of banks there may be additional complications because the acquisition of local banks may be subject to specific federal regulatory rules.
           
3. Outright transfers of C corporation stock during the period of negotiation are permissible.
           
4. The trustee may sell restricted stock as soon as it is placed into the trust.
           
5. A letter of intent is written and signed only by the buyer to confirm his or her intent to buy the property. In other words, it is treated as an offer.
           
6. A letter of intent describes the proposed sale transaction, but does not legally bind either party.
           
7. When the board of directors approves the sale, a binding sale agreement is created.
           
8. Widgets, Inc. board of directors is composed of Al, Bob, Carl and Dan. Combined, all four of them own 20% of Widgets, Inc.'s shares. All of them vote to approve the sale of Widgets, Inc. to Acme, Inc. A binding agreement for the sale of Widgets, Inc. has been created.
           
9. At least 50% of the shareholders must approve the sale in order for a binding sale to result.
           
10. If the directors own at least 50% of the shares, the shareholders nonetheless must approve the sale by a vote of at least 50%.