3 ms·
83(b) Company Repurchase Restriction
I received an 83(b) form from a company I'm doing work with in exchange for shares. The shares/property were transferred on 1/3/2022. In the 83(b) form they included a restriction as follows:
4. The property is subject to the following restrictions: The company may repurchase at cost all or a portion of the shares upon termination of employment or services of the Taxpayer.
Am I reading this correctly that this is a non-terminating clawback whereas they could basically state at any time that I no longer provide them services and they could force me to sell those shares at cost?
- rmk 5y agoI think this is a pretty standard clause which means that unvested but early exercised shares described in the contract can be clawed back. I am not a lawyer, and this is not legal advice, but it looks alright to me.
- jtothez 5y agoThank you! I'm thinking it's ok too - especially in combination with the shareholder's agreement which I believe takes precedence in regards to any conflicts as the company doesn't even countersign the 83b.