Puerto Rico 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). 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: [Insert Date] Time: [Insert Time] Location: [Insert Location] Attendees: 1. [Insert Name] — Chairman of the Board 2. [Insert Name] — CEO 3. [Insert Name— - CFO 4. [Insert Name] — Legal Counsel 5. [Insert Name— - Corporate Secretary Agenda: 1. Call to Order 2. Confirmation of Quorum 3. Approval of Agenda 4. Adoption of Stock Ownership Plan under Section 1244 of the Internal Revenue Code 5. Discussion of Benefits and Implications 6. Approval of Plan's Terms and Conditions 7. Review of Compliance with Legal and Regulatory Requirements 8. Next Steps 9. Other Matters 10. Adjournment Meeting Minutes: 1. Call to Order: The Chairman of the Board called the meeting to order at [Insert Time]. 2. Confirmation of Quorum: The Corporate Secretary confirmed that a quorum of the Board of Directors was present and the meeting could proceed. 3. Approval of Agenda: The agenda was reviewed and approved unanimously without modification. 4. Adoption of Stock Ownership Plan under Section 1244 of the Internal Revenue Code: The Chairman of the Board addressed the importance of adopting a Stock Ownership Plan under Section 1244 of the Internal Revenue Code to provide eligible employees with an opportunity to acquire company stock and promote their ownership interest in the corporation. The Board discussed the benefits and implications of such a plan, including potential tax advantages for both the corporation and eligible employees. 5. Discussion of Benefits and Implications: The CEO and CFO provided a detailed presentation on the benefits of implementing a Section 1244 Stock Ownership Plan. The key advantages highlighted included enhanced employee retention and motivation, reinforcement of a sense of ownership among employees, and potential tax savings for both the corporation and eligible employees. The Legal Counsel further discussed the legal and compliance aspects related to the plan. 6. Approval of Plan's Terms and Conditions: After considering the benefits and implications discussed, the Board reviewed and approved the proposed terms and conditions of the Stock Ownership Plan. The plan includes eligibility requirements, the allocation and vesting schedule of stock options, the exercise price, and any restrictions or limitations applicable to the plan. 7. Review of Compliance with Legal and Regulatory Requirements: The Legal Counsel presented a comprehensive review of the plan's compliance with all relevant legal and regulatory requirements, including those specific to Puerto Rico. The Board was assured that the proposed plan was in accordance with Section 1244 of the Internal Revenue Code and other applicable laws. 8. Next Steps: The Board discussed the next steps required for the successful implementation of the Stock Ownership Plan. This included establishing an effective communication strategy to inform eligible employees about the plan, coordinating with the Human Resources department for administration purposes, and setting a timeline for the rollout. 9. Other Matters: No other matters were discussed. 10. Adjournment: There being no further business to address, the Chairman of the Board adjourned the meeting at [Insert Time]. Types of Puerto Rico 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: — Initial Adoption of Stock Ownership Plan — Amendment of Existing Stock Ownership Plan — Annual Review and Adjustment of Stock Ownership Plan [Insert conclusion or additional relevant information if desired.]

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: [Insert Date] Time: [Insert Time] Location: [Insert Location] Attendees: 1. [Insert Name] — Chairman of the Board 2. [Insert Name] — CEO 3. [Insert Name— - CFO 4. [Insert Name] — Legal Counsel 5. [Insert Name— - Corporate Secretary Agenda: 1. Call to Order 2. Confirmation of Quorum 3. Approval of Agenda 4. Adoption of Stock Ownership Plan under Section 1244 of the Internal Revenue Code 5. Discussion of Benefits and Implications 6. Approval of Plan's Terms and Conditions 7. Review of Compliance with Legal and Regulatory Requirements 8. Next Steps 9. Other Matters 10. Adjournment Meeting Minutes: 1. Call to Order: The Chairman of the Board called the meeting to order at [Insert Time]. 2. Confirmation of Quorum: The Corporate Secretary confirmed that a quorum of the Board of Directors was present and the meeting could proceed. 3. Approval of Agenda: The agenda was reviewed and approved unanimously without modification. 4. Adoption of Stock Ownership Plan under Section 1244 of the Internal Revenue Code: The Chairman of the Board addressed the importance of adopting a Stock Ownership Plan under Section 1244 of the Internal Revenue Code to provide eligible employees with an opportunity to acquire company stock and promote their ownership interest in the corporation. The Board discussed the benefits and implications of such a plan, including potential tax advantages for both the corporation and eligible employees. 5. Discussion of Benefits and Implications: The CEO and CFO provided a detailed presentation on the benefits of implementing a Section 1244 Stock Ownership Plan. The key advantages highlighted included enhanced employee retention and motivation, reinforcement of a sense of ownership among employees, and potential tax savings for both the corporation and eligible employees. The Legal Counsel further discussed the legal and compliance aspects related to the plan. 6. Approval of Plan's Terms and Conditions: After considering the benefits and implications discussed, the Board reviewed and approved the proposed terms and conditions of the Stock Ownership Plan. The plan includes eligibility requirements, the allocation and vesting schedule of stock options, the exercise price, and any restrictions or limitations applicable to the plan. 7. Review of Compliance with Legal and Regulatory Requirements: The Legal Counsel presented a comprehensive review of the plan's compliance with all relevant legal and regulatory requirements, including those specific to Puerto Rico. The Board was assured that the proposed plan was in accordance with Section 1244 of the Internal Revenue Code and other applicable laws. 8. Next Steps: The Board discussed the next steps required for the successful implementation of the Stock Ownership Plan. This included establishing an effective communication strategy to inform eligible employees about the plan, coordinating with the Human Resources department for administration purposes, and setting a timeline for the rollout. 9. Other Matters: No other matters were discussed. 10. Adjournment: There being no further business to address, the Chairman of the Board adjourned the meeting at [Insert Time]. Types of Puerto Rico 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: — Initial Adoption of Stock Ownership Plan — Amendment of Existing Stock Ownership Plan — Annual Review and Adjustment of Stock Ownership Plan [Insert conclusion or additional relevant information if desired.]