A Note on the Legal and Tax Implications of Founders' Equity Splits

Posted: 1 Jun 2009

See all articles by Noam Wasserman

Noam Wasserman

University of Southern California - Lloyd Greif Center for Entrepreneurial Studies

Lauren Barley

affiliation not provided to SSRN

Date Written: February 4, 2009

Abstract

This note summarizes key legal and tax issues that founders should consider as they contemplate an equity split and ownership structure. Specific issues covered include: why founders should not delay splitting the equity, and whether they should involve an attorney or accountant when they do; the importance of considering intellectual property (IP) issues when splitting the equity and the need to do so consistent with Section 351 of the Internal Revenue Code; and the need to make timely and valid Section 83(b) elections if the founders adopt vesting as part of the equity split.

Suggested Citation

Wasserman, Noam and Barley, Lauren, A Note on the Legal and Tax Implications of Founders' Equity Splits (February 4, 2009). HBS Case No. 809-110; Harvard Business School Entrepreneurial Management Unit. Available at SSRN: https://ssrn.com/abstract=1412813

Noam Wasserman (Contact Author)

University of Southern California - Lloyd Greif Center for Entrepreneurial Studies ( email )

United States

Lauren Barley

affiliation not provided to SSRN ( email )

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
592
PlumX Metrics