Michigan Minutes of Special Meeting of the Board of Directors of (Name of Corporation) to Adopt Stock Ownership Plan under Section 1244 of the Internal Revenue Code

• Category: Corporations - Minutes and Resolutions
• State: Multi-State
• Control #: US-1077BG
• Format: Word; Rich Text

Description

Section 1244 of the Internal Revenue Code is the small business stock provision enacted to allow shareholders of domestic small business corporations to deduct a loss on the disposal of such stock as an ordinary loss rather than as a capital loss, which is limited to only $3,000 annually. Normally, stock is treated as a capital asset and if disposed of at a loss, the loss is deducted as a capital loss. The general rule for net capital losses (losses that exceed gains) is that they are subject to an annual deduction limit of only $3,000. Any excess over $3,000 must be carried over to the next year. A loss on Section 1244 stock is deductible as an ordinary loss up to $50,000 ($100,000 on a joint return, even if only one spouse has a Section 1244 loss). Michigan Minutes of Special Meeting of the Board of Directors of (Name of Corporation) to Adopt Stock Ownership Plan under Section 1244 of the Internal Revenue Code Date: [Date of Meeting] Location: [Location of Meeting] Attending: — [Name of Director 1— - [Name of Director 2] — [Name of Director 3— - [Name of Director 4] — [Name of Director 5— - [Name of Director 6] Absent: — [Name of Director 7] Opening: The meeting was called to order at [Time]. [Name of Director 1], the Chairman of the Board, chaired the meeting and served as the presiding officer. The meeting was held in accordance with the Bylaws of the Corporation and proper notice was given to all Directors. Meeting Purpose: The purpose of this Special Meeting was to discuss and adopt a Stock Ownership Plan under Section 1244 of the Internal Revenue Code (IRC). The plan aims to provide certain tax benefits to the shareholders and the corporation as authorized by the IRC. Discussion: [Name of Director 1] commenced the meeting by providing an overview of Section 1244 of the IRC and highlighting its potential benefits for shareholders. The Directors were then given the opportunity to clarify any doubts or seek further clarification regarding the Section 1244 provision. [Name of Director 2] presented a detailed proposal for the Stock Ownership Plan which included the following key aspects: 1. Purpose of the Plan: The plan aims to encourage investment in the corporation and provide potential tax incentives for certain qualifying investments by shareholders. 2. Eligible Shares: Only shares meeting the requirements of Section 1244 of the IRC will be qualified for the benefits under this plan. 3. Tax Treatment: The plan outlines the tax treatment for qualifying shareholders, ensuring that losses from the sale of such shares can be treated as ordinary losses rather than capital losses. 4. Ownership Restrictions: The plan sets forth certain ownership restrictions to maintain the eligibility of shares under Section 1244 of the IRC. 5. Reporting and Documentation: The plan provides guidelines for record-keeping, reporting, and the provision of necessary documentation to claim the applicable tax benefits. Approval and Adoption: After a thorough discussion and consideration of the proposal, a motion was made by [Name of Director 3] and seconded by [Name of Director 4] to adopt the Stock Ownership Plan under Section 1244 of the Internal Revenue Code, as presented by [Name of Director 2]. The motion was carried unanimously. Resolution: The following resolution was passed by the Board of Directors: "Resolved, that the Stock Ownership Plan under Section 1244 of the Internal Revenue Code, as presented and discussed in this meeting, be adopted and implemented by the corporation effective immediately. The President and Secretary of the corporation are hereby authorized and directed to take all necessary actions, including the execution of any required documents, to effectuate the implementation of the plan." Adjournment: There being no further business to discuss, the meeting was adjourned at [Time]. Next Meeting: The next regular meeting of the Board of Directors will be held on [Date], at [Location]. Note: This description is for a general Michigan Minute of Special Meeting of the Board of Directors. There may be variations or different types of meeting minutes based on the specific circumstances or requirements of the Board of Directors of different corporations.

Michigan Minutes of Special Meeting of the Board of Directors of (Name of Corporation) to Adopt Stock Ownership Plan under Section 1244 of the Internal Revenue Code Date: [Date of Meeting] Location: [Location of Meeting] Attending: — [Name of Director 1— - [Name of Director 2] — [Name of Director 3— - [Name of Director 4] — [Name of Director 5— - [Name of Director 6] Absent: — [Name of Director 7] Opening: The meeting was called to order at [Time]. [Name of Director 1], the Chairman of the Board, chaired the meeting and served as the presiding officer. The meeting was held in accordance with the Bylaws of the Corporation and proper notice was given to all Directors. Meeting Purpose: The purpose of this Special Meeting was to discuss and adopt a Stock Ownership Plan under Section 1244 of the Internal Revenue Code (IRC). The plan aims to provide certain tax benefits to the shareholders and the corporation as authorized by the IRC. Discussion: [Name of Director 1] commenced the meeting by providing an overview of Section 1244 of the IRC and highlighting its potential benefits for shareholders. The Directors were then given the opportunity to clarify any doubts or seek further clarification regarding the Section 1244 provision. [Name of Director 2] presented a detailed proposal for the Stock Ownership Plan which included the following key aspects: 1. Purpose of the Plan: The plan aims to encourage investment in the corporation and provide potential tax incentives for certain qualifying investments by shareholders. 2. Eligible Shares: Only shares meeting the requirements of Section 1244 of the IRC will be qualified for the benefits under this plan. 3. Tax Treatment: The plan outlines the tax treatment for qualifying shareholders, ensuring that losses from the sale of such shares can be treated as ordinary losses rather than capital losses. 4. Ownership Restrictions: The plan sets forth certain ownership restrictions to maintain the eligibility of shares under Section 1244 of the IRC. 5. Reporting and Documentation: The plan provides guidelines for record-keeping, reporting, and the provision of necessary documentation to claim the applicable tax benefits. Approval and Adoption: After a thorough discussion and consideration of the proposal, a motion was made by [Name of Director 3] and seconded by [Name of Director 4] to adopt the Stock Ownership Plan under Section 1244 of the Internal Revenue Code, as presented by [Name of Director 2]. The motion was carried unanimously. Resolution: The following resolution was passed by the Board of Directors: "Resolved, that the Stock Ownership Plan under Section 1244 of the Internal Revenue Code, as presented and discussed in this meeting, be adopted and implemented by the corporation effective immediately. The President and Secretary of the corporation are hereby authorized and directed to take all necessary actions, including the execution of any required documents, to effectuate the implementation of the plan." Adjournment: There being no further business to discuss, the meeting was adjourned at [Time]. Next Meeting: The next regular meeting of the Board of Directors will be held on [Date], at [Location]. Note: This description is for a general Michigan Minute of Special Meeting of the Board of Directors. There may be variations or different types of meeting minutes based on the specific circumstances or requirements of the Board of Directors of different corporations.