In the sale of a business, transferring the business to the new owner is the most anticipated step. While it may involve a lot of emotions, it is quite satisfying especially when you are closing at the right price and terms. Your business broker Santa Ysabel will guide you through this. It doesn’t hurt to have a checklist of the things you will need to do when transferring ownership.
What will be transferred?
Long before you get to the transfer stage, your business broker Santa Ysabel will provide you with a complete list of all the things you will have to do once the sale is concluded. Before you say goodbye to your old business and disappear into the sunset, here are the key things you will have to transfer:
- Alarm codes
- Safe combinations, if any
- Computer, software and all online passwords and access codes
- Client list
- Keys to vehicles, buildings and file cabinets
- List of vendors, suppliers and distributors
- Personal contact information
- Operating manuals for equipment
Was your business structured as an LLC or corporation?
If the business was setup as an LLC or a corporation, the business entity will have to be dissolved. When dissolving the entity, here are the things you will need:
- Meet with the partners or board members and pass a resolution to have the business dissolved.
- Using form 966, notify the IRS
- File articles of dissolution with the state in which your business was formed
What you need to close a business?
To cease business operations, you will have to work with a business broker and an attorney to complete a number of steps. If your business was a sole proprietorship, here are the steps you will need to take:
- Notify all contracts assigned or that are assumed by the buyer
- Notify your creditors to let them know how you will pay their bills
- Cancel licenses or permits as well as assumed business names and all other registrations
- Close the business’ line of credit
- Pay all the employee wages and payroll fees and taxes
- Cancel insurance policies that are not assumed by the new owner
- Give a cancelation notice on the lease
- Pay off bills and collect accounts receivable that are not assumed by the buyer
- File the relevant tax forms using the ‘Closing a Business Checklist’ provided by the IRS
- Close your employer ID number with the IRS
- Distribute the assets that remain after the sale
With most business sale transactions, the new owner will request that you stay on board for a period of time. The purpose of this is for you to show the new owner the ropes as well as answer questions. Your business broker San Diego will be able to negotiate the terms regarding how long you will stay on board after closing.