Subchapter S Elections

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Kennedy Sutherland’s attorneys are highly skilled and have extensive experience in helping banks and their owners take advantage of Subchapter S elections in order to achieve maximum profitability and management efficiency. Managing Partner, Patrick Kennedy, Jr., helped promote federal legislation allowing Subchapter S elections by banks and thrifts in 1997 and currently serves as President to the Subchapter S Bank Association. With this wealth of knowledge the firm is able to routinely serve as counsel in corporate restructurings to facilitate a Subchapter S election. In the past decade, our attorneys have handled a significant number of the bank conversions to S Corporation status nationwide. The firm has provided strategic guidance on the following issues involved in any conversion decision:

  • Shareholder numbers
  • Impact on officers, directors and employees and their stock options
  • Cost
  • Impact on capital and dividend policies
  • Impact on cashed-out shareholders, including customers and local residents
  • Impact on future transactions and the ability to raise capital
  • Potential corporate, securities, and regulatory issues
  • Impact on next generation shareholders

The firm also assists its Sub S clients in structuring shareholder agreements and other specific shareholder qualification issues, including analyzing trust agreements and other unique Subchapter S shareholder arrangements. We have also assisted our clients in resolving inadvertent termination occurrences by obtaining private letter rulings from the IRS.

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