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New Member
posted Mar 7, 2025 3:14:56 PM

S-Corp ownership

My husband and I have a small business that is an s-corp.  I had used the business previously (as LLC before transfer to s-corp), so I was the owner.  Now, I work a w-2 job and my husband is the one using the business for his consulting work.  It was recommended that we transfer ownership to my husband (I can't recall why).  Should we transfer the business to my husband 100% or 50/50 or 51/49 to remain woman owned?  The business we do doesn't currently benefit from being woman owned and I don't see that being an issue.  Pros/cons?  Any other considerations?

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1 Replies
Expert Alumni
Mar 7, 2025 4:23:49 PM

 Yes, there are considerations to be made. Let's address these individually.

 

1. 100% ownership by the husband.

 

  • Pros: Simplifies decision-making and tax reporting since only one person owns the business. If your husband is the primary operator, this might align better with the reality of the business.
  • Cons: You lose any formal ownership, which could make it harder for you to make decisions or get benefits from the business's success.

2. 50/50 Ownership:

 

  • Pros: Equal partnership ensures both of you have a say in the business. It also keeps you involved in case you want to return to the business in the future.
  • Cons: Decision-making could become more complex if disagreements arise. Tax implications might also differ compared to sole ownership.

3. 51/49 Ownership (Woman-Owned):

 

  • Pros: Retains the "woman-owned" status, which could be beneficial if you decide to pursue certifications or contracts that favor women-owned businesses in the future. It also keeps you involved while giving your husband the majority stake.
  • Cons: If the business doesn't benefit from being owned by a woman and you don't think it will, this might not be needed.