Zero-basis founder stock, and planning the exemption before you need it

The Form 144 shows Schuurman acquired 7,290,000 shares for EUR 7,290 — a tenth of a cent each — and 5,186,000 for nothing. Nearly the entire proceeds are gain. Your position is structurally identical: founder shares issued at nominal value, with all the value accrued since.

The Canadian analogue is the lifetime capital gains exemption on qualified small business corporation shares, which shelters a substantial amount of gain on a sale of shares (not assets) if the company meets the QSBC tests — broadly, a Canadian-controlled private corporation with the large majority of its assets used in an active business in Canada, tested both at the moment of sale and over the preceding 24 months. The exemption amount is indexed and has been increased in recent years; confirm the current figure with your accountant rather than relying on a number from a report.

What does not transfer is Schuurman’s liquidity. He can sell 2m shares on a Monday. You cannot, which means the QSBC tests have to be satisfied long before a buyer appears, not during diligence.

First step this week: ask your accountant one question — “if I sold the shares tomorrow, would they qualify as QSBC shares, and if not, what is disqualifying them?” The common answers are accumulated cash, passive investments or non-active assets sitting in the operating company, and all of them are fixable with lead time and awkward without it.