World Class Mergers & Acquisitions  |  For Companies $5 Million to $250 Million in Revenue

Mergers & Acquisition FAQ – February 2010

Q: I am interested in contributing money to my Individual Retirement Account for 2009.  Can I still contribute money for the 2009 tax year and if so, when do I have to do this?

A: Taxpayers have until April 15, 2010 to make 2009’s IRA contribution.  Additionally, if one chooses to file their tax return before the contributions are actually made to the IRA account, one can do that as well.

Q: I want to establish a phantom stock plan for the benefit of my employees.  What does this involve and how can I start it?

A: A phantom stock plan is a compensation system that rewards an employee’s performance based on the overall performance and increase in value of the company.  Since phantom stock is not comprised of physical shares of the company, phantom stockholders do not necessarily hold an equitable interest or voting interest in the company.  The best way to start a phantom stock plan is to speak to a knowledgeable attorney and have him or her discuss your needs and act from that point preparing specific documents with specific language.

Q: I have recently had my business valued.  The value between what I believe the value should be and what is calculated are completely different.  Why is this?

A: There could be any number of reasons for this dilemma.  Valuations are based upon assumptions, figures provided, and calculations based upon them.  The numbers, assumptions, and calculations may not necessarily reflect the value of the business to an owner.  There are methods and procedures available to improve the value of a business to a willing buyer.  It is with these improvements, a business’ value can be augmented.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors