Backdating cases

The problem is that, I believe, to enable this scenario to become reality, there should have been an amendment made to the original operating agreement for each of the six LLCs indicating a transfer of ownership from the husband and wife, to the S-corp, which is also owned 50/50 by the husband and wife.As I understand it, this amendment should have been created and signed immediately after the original agreement so that this ownership would have been in effect for the entire year, or since inception in the case of the new entities.But if we cannot file a consolidated return, each entity will have to file separately (on Form 1065), and the owners may not be able to take advantage of the loss due to lack of sufficient basis in that one entity.This would mean that the owners would have to pay a lot of taxes on the profits of the other initial LLC for year 2012.The SEC would go on to investigate and sue companies and related parties that were found to backdate options, in some cases, as part of fraudulent and deceptive schemes.

The intention was that each of these entities would be “divisions” of the original S-corp which would be the “holding company” for them all, which would have made it possible for just one tax return to be filed under the tax ID of the holding company.The LLCs would have been “disregarded entities” with the owner being the holding company, 100%.This would have reduced tax return preparation time for year 2012 by making it possible to file just one consolidated return, and this arrangement would have made it possible for the profits and losses of these six entities to be netted against each other within the holding company S-corp.The legal complaint alleged that from 1993 to 2006, the former CEO and the former chief accounting officer directed the company to engage in schemes to provide undisclosed compensation to executives and certain employees. Lin was accused of backdating stock option documents in order to give the appearance that options were granted on earlier dates than issued.This scheme was allegedly used to the benefit of officers and employees of the company as well as its directors.

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