Legal Translation, Court Translation and Handing Down a Foreign-Based Family Business

Legal translation plays an important role in day-to-day operations of any going concern with a foreign ownership interest. When one has a successful business, the owner often wants to transfer ownership to a relative or relatives. However, without careful tax planning, the relatives inheriting the business quickly find themselves having to sell the business in order to pay estate taxes. This unfortunate situation can easily be avoided with careful planning – particularly if the business is foreign-based.

One common way to transfer a business is by transferring stock. This can be done by bequeathing the stock via the owner’s will, which avoids income taxes, but not estate taxes (which can reach 55 percent). Another method is to transfer company’s stock as a tax free gift – although the recipient will face significant taxes when they opt to sell the stock. Still another option is selling company’s stock to the next generation with the buyer purchasing it with after-tax dollars and thus recognizing a taxable gain upon sale. And, finally, there is the possibility of redemption, where the next generation already owns the business and the corporation is able to redeem the controlling owner’s stock.

When the company is foreign-based, similar considerations applies. When a transfer agreement is carried out, all the documents should contain a foreign language translation. This pertains to foreign-branch companies, to foreign subsidiaries of a U.S. company, and to foreign corporations.

Up Next: Legal Interpreting Services
and Lack of English Proficiency in Jurors: The State Interest

All Language Alliance

by Legal Translator

New Default