Distributor's Link Magazine Summer 2018 / Vol 41 No3
140 THE DISTRIBUTOR’S
140 THE DISTRIBUTOR’S LINK UNICHEM FASTENER MANUFACTURERS IMPROVE ‘DRIVABILITY’ WITH UNIQUE COATINGS from page 66 construction site or a DIYer uses a finish nailer to install moldings or baseboard, no one wants to interrupt the job to change out, or recharge, a dead battery. The same is true for anyone using a cordless screwdriver, drill driver, or impact driver. To address this issue, various strategies have been employed to extend battery life. Some include moving to more powerful, longer-lasting lithium batteries along with “The specialty coating allowed the customer to techniques to avoid overcharging. re-launch the product and market it as incorporating new, Instead, Chin suggests forward thinking fastener improved technology,” explains Chin. “They were able to manufacturers consider custom coatings that help to increase their revenue and were very successful with it.” speed jobs and maximize cordless power tool life in the The coating also potentially increases the number of field. nails that could be driven on a single, full battery charge, “In a competitive market like fasteners, coatings can a high priority for cordless tool manufacturers and users. be used to create innovative new products with a clearcut differentiation from the competition,” says Whether a pro wields a framing nailer at a Chin. UNIVERSAL CHEMICALS & COATINGS ROMAN BASI CLOSING OF THE BOOKS from page 80 Thus, it’s wise to speak to a tax or accounting specialist to determine which is better. The final method that can be used is called the “Reasonable Method”. Federal tax regulations will allow a partnership to allocate the taxes pro rata for departing partners, while also allowing the partnership to collect some profit for the rest of the year on income they may have contributed to. For instance, a partner departs from its law firm, but contributed to a case that will be settled 6 months later; the firm can opt to pay them from that profit and still have the new partnership structure remain the same. All of these methods and terms are controlled by 26 USC 1377, which provides definitions and structure to all the methods mentioned above. Furthermore, there are a number of steps that can help a corporation and shareholders proceed cleanly should a situation arise where they might want to close the books. The first, is to enter into a shareholder agreement at the beginning of the corporation, the agreement can have the structure in writing and the proceedings should someone be bought out. Another potential step, is to troubleshoot conflicts that may arise prior to formation of the conflict, such as conflicting schedules with other work, make sure to work this into the agreement. Troubleshooting before formation of the corporation can help when the agreements are drawn up, and assist in creating a fair contract for termination of shareholder’s interests. An example of a shareholder agreement may look something like, “Company X will have a closing date of Y, unless during the taxable year shareholders hold a special election pursuant 26 USC 1377 and with a unanimous vote elect to close the books early.” To conclude, the “closing of the books” method is a good way for S-corporations to change shareholders or officers without complicating company books/financials over change of ownership. However, depending on the variations between each company it may or may not be beneficial to close the books accordingly. Other factors must also be analyzed to adequately determine the best path forward for your business. Some of the other factors may include type of shareholder termination, purchase agreements, and shareholder agreements. The corporate structure can be complicated to navigate in times of buyouts and shareholder disagreement, but it doesn’t have to be. ROMAN BASI
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