SUMMER 2018

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