For owners who have made the decision to sell, leave or otherwise dispose of their business, how they go about it has implications on employees, assets, and tax obligations. Here are seven tips from Small Business Administration.
Develop a Succession Plan
For business owners exiting the business but hoping the company remains running, they need to choose and train a successor. Training the person will offer some you some peace of mind that the business will continue to operate as normal.
Steps to Closing a Business
There are several steps to closing a business depending on the type of business. You may need to legally dissolve it if the business is an LLC or corporation. Resolve any financial obligations by closing any accounts, and be sure to settle any remaining debt and taxes before leaving or closing shop. Be sure to maintain records for three to seven years after the business is closed.
Selling Your Business
If you decide to sell the business, you will need to prepare a sales agreement that includes all the items included in the purchase. The SBA recommends having a specialized lawyer review the paperwork to make sure everything is legitimate and nothing is overlooked.
If you decide to transfer ownership to either an current employee, family member or an outsider, there are several options to do this, including an outright sale, gradual sale or lease agreement.
Seek Out Resources
There are many legal resources to assist in the process of exiting your business, like dealing with environmental permits, intellectual property to privacy for online business.
For owners considering liquidating assets, a lawyer and/or accountant may be helpful in following this strategy properly and valuing the assets correctly.
Filing for Bankruptcy Protection
For sinking businesses facing bankruptcy, be sure to follow IRS guidelines to make sure you are following all legal procedures.
For entrepreneurs ready to get out of their business—no matter the reason—how you get out of a business is just as important as how you launch it.