Ron is starting a construction business, which he wants to make an S corporation. He meets with his tax consultant, Lloyd, for advice prior to the final organization, and then he issues the stock. He will own 51% of the common stock and sell the remainder to other investors. Ron has 75 prospective purchasers and will call about 25 friends to give them an opportunity. He also plans to sell 100 shares of preferred stock to another corporation, which is owned by his brother. He tells Lloyd that this will give him enough capital to fund the company. He mentions that an investor, his next-door neighbor, Jon, is excited about the opportunity. Jon has only been in the United States for a short time and does not have a green card. Lloyd expresses several concerns. What would be Lloyd's concerns?

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Answer Lloyd the tax consultant would likely have several concerns regarding Rons plans to form an S corporation and the issuance of stock Some of the ... View the full answer