Oct. 19, 2016
Will Founders Shares in Startups be Double Taxed? Strait Solution to Reverse Vesting
One popular and important mechanism in the relationship between a startup and its founders is the reverse vesting. The mechanism enables the company to repurchase from a founder’s shares, when he and the company separate earlier than expected. In the last several years, the concern that the tax to be imposed on such shares shall be doubled increased. Recently, the Israeli Tax Authority (the “ITA”) eliminated such concern.
What is the reverse Vesting Mechanism?
The founders of startup are usually considered as one of its important assets. Therefore and due to the legal and practical difficulty to ensure that …
Read more »
