Related Party Structuring / Management

A related party transaction is a transaction wherein the same individual controls both sides of the transaction.  Examples of related party transactions include the sale of an asset, a lease of property, or the lending/borrowing of money.  The importance of properly handling related party transactions cannot be over-emphasized.  All related party transactions should be “arms-length," properly documented and adhered to.  A good question to ask is: “Is this how I would handle the transaction if I were dealing with an unrelated party?”.  The dangers of not properly handling a related party transaction include adverse tax and legal consequences. 

 

"Opportunity is sometimes hard to recognize if you're only looking for a lucky break." - Monta Crane, writer