Form Your Company Right. Know Your QSBS Will Hold Up.
Section 1202 can make up to $15 million of gain per shareholder tax-free when you sell, but only if the company is formed and documented correctly from day one. We form your company, build QSBS protections into your governing documents, and give you an attorney’s attestation letter for your records.
$15M
Per Shareholder
For stock issued today, Section 1202 can exclude up to $15 million of gain per shareholder from federal tax when you sell.
In Writing
Attorney Attestation
An attorney’s attestation letter goes in your company records, substantiating eligibility at issuance while the facts are provable.
Built-In
Document Protection
Your shareholders’ agreement carries QSBS covenants that help preserve qualification as the company grows.
Qualify From Day One, and Keep the Proof
QSBS eligibility is decided at issuance: the entity type, the gross-assets test, and how the founder shares are issued. Years later, the burden of proving all of it falls on you.
Our process gives you a company that qualifies from day one, with the proof in your records.
Have questions? Start your free analysis to get clear answers.
Form the Right Entity
Section 1202 requires a domestic C corporation. We form it correctly for your state and your plans, with QSBS in mind from the first filing.
Follow a Clear Plan
We sequence formation, founder shares, and any investor round in the right order, with the records to prove each step.
Avoid Disqualification
The wrong entity, contributed assets with the wrong basis, or a careless redemption can disqualify the stock. We structure around the traps before they exist.
Preserve Continuity
Your documents keep the company qualified as it grows: C corporation covenants, gross-assets procedures, and redemption protections are built into the shareholders’ agreement.
Get the Attestation Letter
You receive an attorney’s attestation letter and a substantiation file for your company records: proof of eligibility at issuance, assembled while the facts are fresh, ready if the IRS ever asks.
How Founders Lose QSBS at Formation
QSBS eligibility is set by decisions made at formation: the entity, the gross-assets test, and how the shares are issued. Founders who form first and think about Section 1202 later fall into predictable traps. Here are the most common ones we see.
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Forming the wrong entity
An LLC or S corporation does not issue QSBS. Founders who default to an LLC and convert later start the clock late and leave their early growth outside the exclusion.
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Contributed assets that blow the gross-assets test
Property contributed at formation counts toward the gross-assets test in ways that surprise founders, and the wrong sequencing can disqualify every share. The order of formation, issuance, and acquisition is a deliberate structuring decision.
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No proof when the IRS asks
The burden of proving eligibility falls on the taxpayer, often a decade after formation. Without records made at issuance, founders end up trying to reconstruct evidence that no longer exists.
Frequently Asked Questions
Quick answers to common questions that we hear. Each of these is covered in more detail in our free analysis.
Qualified small business stock is stock in certain C corporations that, if the requirements are met, lets you exclude gain from federal tax when you sell, up to $15 million per shareholder for stock issued today. The full exclusion requires holding the stock for the required period.
Eligibility is tested when the stock is issued: the entity must be a C corporation, the company’s gross assets must be under the limit, and the shares must be original issuance. Those facts exist at formation, and so does the cheapest chance to document them.
Your free analysis shows what the exclusion could be worth for your company and how we would structure it.
It is an attorney’s letter for your company records stating the basis for the company’s QSBS eligibility at issuance, backed by a substantiation file.
The burden of proving the exclusion falls on you, the taxpayer, often many years later.
The letter and the file are the proof, assembled while the records exist.
Your CPA uses it at filing; you use it if the IRS ever asks.
The QSBS Formation Package is $2,500 down plus $100 per month for twelve months. That covers the formation, the QSBS provisions in your governing documents, the attestation letter with per-founder letters, and a year of Business Counsel, with your eligibility records refreshed annually while the subscription continues.
For comparison: attorney attestation letters bought at exit commonly run $10,000 or more, against records that may no longer exist.
Formation With Section 1202 Built In
Anyone can file a certificate of formation. The value is a company that qualifies for the exclusion and can prove it. Your free QSBS Formation Analysis will help you:
- See the dollar value of the exclusion for your expected exit
- See how we would structure it: entity, issuance sequence, and document protections
- Spot disqualifiers early: excluded businesses, asset issues, redemption traps
- Keep the proof: an attestation letter and records from day one
See What QSBS Could Be Worth Before You Form
Answer a few questions and get a written analysis: your estimated exclusion, how we would structure the company, and what could disqualify you. The QSBS Formation Package is $2,500 down plus $100 per month for twelve months.
Designed for Business Owners Who Need Straight Answers
I’m Jeramie Fortenberry, a business and tax attorney who has spent more than 20 years helping business owners solve multi-state legal problems.
I built this service after years of seeing QSBS problems that started at formation and surfaced at sale, when it was too late to fix them.
My goal is simple: form your company so the exclusion holds up, with the proof in your records, working alongside your CPA. No unnecessary upsells.
Jeramie J. Fortenberry, Esq., Founder
