Shareholder Agreements
At Sutter Law, we understand that shareholder and stock purchase agreements are an essential part of any business’s success. Whether you are forming a new business or have an existing business, our experienced business and transactional attorneys can provide legal guidance and representation to ensure that your interests are protected.
Shareholder Agreements
We assist clients with drafting and negotiating shareholder agreements that protect their interests while complying with California laws and regulations. Our transaction attorneys can provide guidance on issues such as voting rights, share transfers, vesting stock, SEC lockups, 13(h) compliance and dividend distributions.
Buy-Sell Agreements
We assist clients with creating buy-sell agreements that provide a mechanism for shareholders to buy or sell their shares in the event of certain events, such as death, disability, or retirement. Our corporate attorneys can ensure that the agreement complies with California laws and regulations and reduces the risk of legal disputes.
Employee Stock Option Plans (ESOPs)
Employee Stock Option Plans (ESOPs) are a powerful tool for attracting, retaining, and incentivizing top talent—especially in startups and growth-stage companies. A well-designed ESOP aligns employee interests with company performance and can play a key role in compensation strategy and exit planning. At Sutter Law, we help companies structure and implement equity compensation plans that are legally sound, tax-efficient, and tailored to business goals. From plan design and option grants to compliance with securities laws and cap table management, we provide end-to-end legal support throughout the equity lifecycle.
Tax Analysis for Stock Transactions
Stock transactions in mergers, acquisitions, or equity financing can trigger complex tax consequences for both companies and shareholders. Proper tax planning is essential to avoid unexpected liabilities and to optimize the after-tax outcome of a deal. At Sutter Law, we provide strategic tax analysis for stock sales, exchanges, and equity issuances—considering factors such as capital gains treatment, Section 1202 QSBS eligibility, 83(b) elections, and withholding requirements. Our goal is to help clients make informed decisions that align with their financial and strategic objectives while remaining compliant with evolving tax laws.
Section 1202 QSBS Tax Treatment
Section 1202 of the Internal Revenue Code provides a significant tax benefit for investors and founders in qualified small businesses. If certain requirements are met, it allows for the exclusion of up to 100% of capital gains from the sale of Qualified Small Business Stock (QSBS), potentially resulting in substantial tax savings. To qualify, the stock must be issued by a domestic C corporation, held for at least five years, and meet active business and gross asset thresholds, among other criteria. At Sutter Legal, we advise founders, investors, and acquirers on structuring and documenting transactions to preserve 1202 eligibility. We also assist with tax compliance, due diligence, and risk assessment to ensure clients maximize the available tax advantages while avoiding costly pitfalls.
Shareholder Disputes
We provide legal representation and guidance in shareholder disputes, whether they arise from disagreements over management decisions, dividend distributions, or share transfers. Our business attorneys can assist with resolving disputes through negotiation, mediation, or litigation.
Secondary stock sell review and negotiations
Secondary stock sales—where existing shareholders sell their shares to new investors—are increasingly common in growth-stage startups and pre-IPO companies. These transactions raise unique legal, tax, and strategic considerations, including transfer restrictions, right of first refusal (ROFR), information rights, and valuation concerns. At Sutter Legal, we represent founders, early employees, and investors in reviewing and negotiating secondary sales to ensure fair pricing, proper disclosures, and compliance with company policies and securities laws. Our goal is to protect your equity value, minimize risk, and help you navigate liquidity events with confidence.
Long-Term Capital Gains
Long-term capital gains are profits from the sale of assets held for more than one year, and they benefit from favorable tax rates compared to short-term gains. In the context of mergers, acquisitions, and equity transactions, proper structuring can ensure that gains qualify for long-term treatment—resulting in significant tax savings for founders, investors, and employees. At Sutter Law, we help clients plan for and preserve long-term capital gains eligibility, whether through stock sales, earn-outs, or equity incentive plans. We also evaluate strategies such as installment sales, 1202 QSBS exclusions, and Section 1045 rollovers to optimize tax outcomes in complex transactions.
Corporate Governance
We provide guidance on corporate governance matters related to shareholder agreements, including director and officer responsibilities, shareholder meetings, and record-keeping requirements. Our business attorneys work with clients to ensure that they comply with corporate governance requirements and mitigate the risk of legal issues arising in the future.