Shareholder in US based company
Companies need to go public before you can buy their shares on a public stock exchange, but all companies have shares, even if there's only one share. And anyone who owns those shares can give them to whoever they like (there are generally restrictions on selling shares in unlisted companies to unsophisticated investors, but not on giving them away).
"Yes and no.  There are different classes of shares - Some have voting rights, some *don't*.  Some take precedence over others in a bankruptcy.  Some get larger dividends.  ""Common"" isn't really a useful description of your stake in the company.  You *do* have a ""stake"" in the company, but not all shares are equal." If you are tax-resident in the US, then you must report income from sources within and without the United States.  Your foreign income generally must be reported to the IRS.  You will generally be eligible for a credit for foreign income taxes paid, via Form 1116. The question of the stock transfer is more complicated, but revolves around the beneficial owner.  If the stocks are yours but held by your brother, it is possible that you are the beneficial owner and you will have to report any income. There is no tax for bringing the money into the US.  As a US tax resident, you are already subject to income tax on the gain from the sale in India.  However, if the investment is held by a separate entity in India, which is not a US domestic entity or tax resident, then there is a separate analysis.  Paying a dividend to you of the sale proceeds (or part of the proceeds) would be taxable.  Your sale of the entity containing the investments would be taxable.  There are look-through provisions if the entity is insufficiently foreign (de facto US, such as a Subpart-F CFC).  There are ways to structure that transaction that are not taxable, such as making it a bona fide loan (which is enforceable and you must pay back on reasonable terms).  But if you are holding property directly, not through a foreign separate entity, then the sale triggers US tax; the transfer into the US is not meaningful for your taxes, except for reporting foreign accounts. Please review Publication 519 for general information on taxation of resident aliens. "You should contact the company and the broker about the ownership. Do you remember ever selling your position? When you look back at your tax returns/1099-B forms - can you identify the sale? It should have been reported to you, and you should have reported it to the IRS. If not - then you're probably still the owner. As to K-1 - the income reported doesn't have to be distributed to you. Partnership is a pass-through entity, and cannot ""accumulate"" earnings for tax purposes, everything is deemed distributed. If, however, it is not actually distributed - you're still taxed on the income, but it is added to your basis in the partnership and you get the tax ""back"" when you sell your position. However, you pay income tax on the income based on the kind of the income, and on the sale - at capital gains rates. So the amounts added to your position will reduce your capital gains tax, but may be taxed at ordinary rates. Get a professional advice on the issue and what to do next, talk to a EA/CPA licensed in New York." Where can publicly traded profits go but to shareholders via dividends? They can be retained by the company. "Is it equity, or debt? Understanding the exact nature of one's investment (equity vs. debt) is critical. When one invests money in a company (presumably incorporated or limited) by buying some or all of it — as opposed to lending money to the company — then one ends up owning equity (shares or stock) in the company. In such a situation, one is a shareholder — not a creditor. As a shareholder, one is not generally owed a money debt just by having acquired an ownership stake in the company. Shareholders with company equity generally don't get to treat money received from the company as repayment of a loan — unless they also made a loan to the company and the payment is designated by the company as a loan repayment. Rather, shareholders can receive cash from a company through one of the following sources: ""Loan repayment"" isn't one of those options; it's only an option if one made a loan in the first place. Anyway, each of those ways of receiving money based on one's shares in a company has distinct tax implications, not just for the shareholder but for the company as well. You should consult with a tax professional about the most effective way for you to repatriate money from your investment. Considering the company is established overseas, you may want to find somebody with the appropriate expertise." *Disclaimer: I am a tax accountant , but I am not your professional accountant or advocate (unless you have been in my office and signed a contract). This communication is not intended as tax advice, and no tax accountant / client relationship results. *Please consult your own tax accountant for tax advise.** A foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a C corporation A foreign citizen may be a corporate officer and/or director, but may not work/take part in any business decisions in the United States or receive a salary or compensation for services provided in the United States unless the foreign citizen has a work permit (either a green card or a special visa) issued by the United States. Basically, you should be looking at benefiting only from dividends/pass-through income but not salaries or compensations. You're asking whether the shares you sold while being a US tax resident are taxable in the US. The answer is yes, they are. How you acquired them or what were the circumstances of the sale is irrelevant. When you acquired them is relevant to the determination of the tax treatment - short or long term capital gains. You report this transaction on your Schedule D, follow the instructions. Make sure you can substantiate the cost basis properly based on how much you paid for the shares you sold (the taxable income recognized to you at vest). "If you swap the word ""shareholder"" for ""investor"" I think it helps clarify things. If you owned 51% of the company you'd get to say what to do with the cash, would you not? Managers are smart and successful, but ultimately just employees. Companies are beholden to their shareholders.   In a more practical sense, I would think the board (representing shareholders) and the upper management would have to come up with a plan. But shareholders have the ultimate say." Shareholders have voting rights, and directors have fiduciary obligations to shareholders. Sure, shareholders have rights to the dividends, but stock confers decisionmaking powers. I'm not really sure what your answer to this is, or how you are differentiating the concept of ownership from this. The key there is Large companies.  The vast majority of companies in the US are small businesses with little or no international presence, and are taxed at the full 35%.  Their very large competitors, however, have the ability to flout US corporate taxes, and therefore keep more of their profits - whether in terms of retained earnings or higher dividends to shareholders. "Many thanks for thedetailed  response, appreciate it. But I am still not clear on the distinction between a public company and the equity holders. Isn't a public company = shareholders + equity holders? Or do you mean ""company"" = shareholders+equity holders + debt holders?" You actually have a few options. First, you can do a share split and then sell an equal number of shares from both you and your wife to maintain parity. Second, you can have the company issue additional shares/convert shares and then have the company sell the appropriate percentage to the third party while the rest is distributed to you and your wife. Third, you can have the company issue a separate class of stock. For example there are companies that have voting stock and non-voting stock. Depending on your goal, you could just issue non-voting stock and sell that.  Best bet is to contact a lawyer who specializes in this type of work and have them recommend a course of action. One caveat that has not been mentioned is that what/how you do this will also depend on the type of corporation that you have created. Congratulations!  You own a (very small) slice of Apple. As a stockholder, you have a vote on important decisions that the company makes.  Each year Apple has a stockholder meeting in Cupertino that you are invited to.  If you are unable to attend and vote, you can vote by proxy, which simply means that you register your vote before the meeting.  You just missed this year's meeting, which was held on February 26, 2016.  They elected people to the board of directors, chose an accounting firm, and voted on some other proposals.  Votes are based on the number of shares you own; since you only own one share, your vote is very small compared to some of the other stockholders. Besides voting, you are entitled to receive profit from the company, if the company chooses to pay this out in the form of dividends.  Apple's dividend for the last several quarters has been $0.52 per share, which means that you will likely receive 4 small checks from Apple each year. The value of the share of stock that you have changes daily.  Today, it is worth about $100.  You can sell this stock whenever you like; however, since you have a paper certificate, in order to sell this stock on the stock market, you would need to give your certificate to a stock broker before they can sell it for you. The broker will charge a fee to sell it for you.  Apple has a website for stockholders at investor.apple.com with some more information about owning Apple stock.  One of the things you'll find here is information on how to update your contact information, which you will want to do if you move, so that Apple can continue to send you your proxy materials and dividend checks. "The shares are ""imputed income"" / payment in kind. You worked in the UK, but are you a ""US Person""? If not, you should go back to payroll with this query as this income is taxable in the UK. It is important you find out on what basis they were issued. The company will have answers. Where they aquired at a discount to fair market value ? Where they purchased with a salary deduction as part of a scheme ? Where they acquired by conversion of employee stock options ?    If you sell the shares, or are paid dividends, then there will be tax withheld." "If a company earns $1 Million in net profit (let's say all cash, which is not entirely realistic), it can do one of three things with it: On the balance sheet - profits that have not been distributed show up as ""retained earnings"".  When dividends are paid, Retained Earnings and cash are reduced. None of the other options change the fact that it is still ""profit"" - they all just affect the balance sheet, not the income statement: Note that when a company issues dividends, it reduces its per-share value since cash is leaving the door with nothing in return.   In Apple's case, since a significant amount of its profit was earned in other countries (where it was not taxed by the US), it would pay a significant amount in US corporate tax by bringing it back to the US by investing it or paying dividends. They are betting that at some point, the US will change the rules to make it more favorable to ""repatriate"" the money and reduce their tax significantly."