4 Ways To Transfer Business Ownership
There are many reasons why you would want to transfer ownership of your business, whether in whole or in part. Maybe you are ready to retire and wish to pass the reins on to someone else. Maybe you still want to be involved in running the business but wish to share the responsibilities with someone else. Our Commercial Law lawyer Lehigh Valley PA, will assist you in all your business ownership concerns. Reach out today.
Here are several different ways to transfer a business which you can choose from.
1. Adding a Partner
Adding a partner is a way to remain involved in the business and earn some money via the sale of interests in the company to one or more partners. These partners will then share the responsibility of running the business and split the profits with you. While you may make other arrangements to accommodate your new partner, a cash transaction is typical.
2. Selling the Business
If you have decided that you do not want to run the business anymore, you can sell it to a new owner. One way of doing this is with an owner-financing sale. This requires you to draw up a transfer of ownership form in which you and the buyer agree on a series of installment payments for the buyer to make until the entire cost of the business is covered. Another way is for you and the buyer to agree on the valuation of the business assets and for the buyer to pay you for the business upfront, either with a loan that he or she has obtained or with cash or capital savings.
3. Family Member Transfer
If you want a family member to run your business, the options of selling the business to him or her or adding him or her as a partner are available. However, you also have the option of giving the company to your family member as a gift. If you gift shares of your business to a family member in regular installments worth $15,000 or less once a year, you can avoid paying gift taxes on the transfer.
If a buyer is not yet committed to the purchase of the business, a lease-purchase agreement may be worthwhile. This transfers ownership of the company to the buyer for a limited time according to the lease agreement. The buyer then has the option of either returning control of the business to you, buying the company, or continuing leasing.
Sooner or later, you will either have to close your business or transfer it to someone else.
Talk to one of our Commercial Law lawyer Lehigh Valley PA about options for transferring your business if you want it to continue after you are no longer able or willing to operate it. We at Hoegen & Associates, P.C care for you and would like to see you have a smooth transfer of your business.