- Click Here For More Specific Information On:
- Multi Member Llc
How to Sell a Business in Sacramento CA
Kris KoonarIf you are a business owner in Sacramento, there may come a time when you want to sell the business. You may want to sell it for various reasons such as, change of location, some financial reasons, family commitments etc. Even if you are not planning to sell the business there is no harm in finding out how much you may fetch at the moment. If you are keen on selling the business do it when it is in a good shape and make good money. You may eventually be tempted to get a good price from the sale and start with a new venture at another location. If you do decide to sell your business, there are some things that you need to keep in mind.
Determine the right price for the business: If you set the price too high, then there is a chance that buyers would lose interest and if priced too low you may not get good margins. You need to do a proper valuation of the business, preferably by a professional or an appraiser. Never get the valuation done from a real estate broker who deals with commercial real estate and not the sale of the entire business entity. There are many ways in which you can have the valuation done. You may decide on the price, considering the value of the business assets, or add goodwill to that value and fix up a price.
You also need to understand the tax consequences: Taxes may take away a major chunk of your earnings from the sale. Depending upon the type of business, whether it was an entity itself or just an asset, the sale and price would depend much on this factor. Typically sole proprietorship, partnerships, LLCs and corporations are asset sales. Here you would allocate the price to the assets and then classify them under the seven IRS classes. The gains would be classified further as long-term capital gains as taxed accordingly. If it is an entity sale you sell all the corporate stock in the company. The buyer winds up owning the entity itself.
A preparation for the sale also includes cleaning and tidying up the premises to make them look very presentable. Then straightening up the tax returns by adding some discretionary expenses to your profit. Once you are done with these basic preparations then you ought to search for buyers. If your business were well known, word of mouth would be enough to get you prospective buyers. Someone among your family, friends, relatives or employee who may be interested in buying it or you may take the services of the brokers, who would help find buyers.
Check out the buyer and work out the terms and conditions of the sale, like the payment terms, sale of business entity or the assets, the down payments and so on. Once all these terms are worked out with the buyer then sign the sales agreement and ensure that you include certain protections for yourself, so that you receive the entire payment on time. To close the deal, transfer the entire business to the buyer.
Check all the papers and documents that will change hands and any other documents and items that have to be handed over like the alarm codes, security codes, asset allocation statement (IRS form 8594) etc. With all documentation completed and handed over, both the buyer and you need to complete IRS form 8594 and file it with your tax returns for the year. You and the buyer have to fill it together and file duplicate copies of the form with the tax returns for the year.
Keeping in mind the above tips and with some professional help and proper planning to attract prospective buyers, you could sell your business in Sacramento with least losses.Sacramento Limos
are not all the same.
has the best fleet in Sacramento to ensure your event is memorable. Check out our Limosine Fleet at: