Photo of Frederic L. Smith Jr.

Frederic Smith has nearly 20 years of experience representing businesses in M&A transactions, contract negotiations, joint venture transactions and financing transactions. In addition to his transactional practice, Frederic serves as outside general counsel to several privately held and family-owned businesses. View articles by Frederic

The Importance of Dividend Policies for Family-Owned BusinessesIn our family business practice, we commonly see conflicts between shareholders who are active in the business and shareholders who are not active in the business. The conflict usually arises from the relatively rich compensation paid to the active shareholders (in the forms of salary, bonuses and other benefits) versus the relatively paltry dividends paid

New Limitations on Deductions for Interest Payments May Impact Many Family BusinessesThe new Tax Cuts and Jobs Act limits the ability of many businesses to deduct interest payments. Under prior law, any interest expense was generally deductible. Now, many businesses are prohibited from deducting any interest expense that exceeds 30 percent of adjusted taxable income.

Before January 1, 2022, the formula for calculating net taxable income