BUYER SHOULD TAKE THESE ACTIONS:
- Buyer should get new EIN
- Buyer should get new LLC
- Buyer should file new DBA for the exact same business name
(Seller will need to contact Secretary of State to explain that when they see the application come through from the Buyer, it’s okay to approve it because you’re selling the “asset” of the business name to the Buyer)
- Buyer should get new business license
(Seller will need to contact the City Business Licensing to explain that when they see the application come through from the Buyer, it’s okay to approve it because you’re selling the “asset” of the business to the Buyer)
- Buyer should retain a lawyer to review all legal documents
Buyer should open a new business bank account with 1 savings + 2 checking accounts.
- Checking Account #1: All income should be deposited here, and all expenses should be taken from this account with the exception of Payroll expenses as explained below
- Checking Account #2: All Payroll expenses should be taken from this account, including: payroll, federal withholding, state withholding, FUTA, SUTA, and federal/state tax pre-payments (the cost to hire someone to do your payroll should NOT come out of this account however)
SELLER SHOULD TAKE THESE ACTIONS:
- If you have a lease agreement, you’ll want to talk to your landlord and come to an agreement where the Buyer can enter into a new lease agreement and your agreement will terminate when the new agreement is signed.
- Cancel all vendor accounts. Tell them the Buyer’s name so they can create an account for her.
- Some accounts have a phone number associated to it, such as email accounts, etc. Check all accounts and ensure they accounts have the Buyer’s phone number associated to it if the Buyer is keeping the account in the Asset sale. If you are keeping the account, make sure to change it to your own phone number.
- Transfer business phone number # to Buyer’s account.
- Transfer utilities into Buyer’s name on the date of the sale. Stop all automatic withdrawals.
Set aside money after the sale for tax implications, which will likely be:
- Federal taxes due the following year: 15% of sales price
- State taxes due the following year: 7% of sales price