Cedar Rapids Attorney for Transferring or Closing a Business
Experienced Legal Advice in Business Sales and Transfer
Transferring a business or closing on the sale of a business can be a complicated transaction. If you are about to engage in a transaction with a potential buyer, turn to Howes Law Firm for reliable counsel and trusted guidance.
We can put decades of experience to work for you to ensure that your closing goes smoothly and to help you avoid any unnecessary pitfalls. Our firm’s longstanding presence in the area has earned us the respect and confidence of business owners, individuals, and families who have enlisted our services since 1989.
Selling or Transferring a Business in Iowa
There is more than one way to transfer or sell a business, all of which can be accomplished through a detailed contract. Selling a business to an outside party may occur or you may transfer your business to family members, co-owners, or employees.
Sales and transfers may include:
- An outright sale in which the buyer(s) becomes the immediate owner(s) of the business, giving the seller all money paid upfront.
- A gradual owner-financing sale, where the buyer(s) makes payments over a certain period of time, giving the seller graduated income.
- A lease agreement, or lease-purchase, that temporarily transfers ownership under the terms of its contract.
- A transfer to a family member, completed in segments to avoid gift taxes
A business transfer or sales agreement will dictate the terms, what is being transferred, and how the goods or services will be handed over. In the case of a gradual sale, the business seller may also mentor the buyer until the purchase is complete.
How the Structure of the Business Informs Ownership Transfer
Depending on the type of business structure, there may be certain legal obligations in a sale or transfer. Additionally, when selling or transferring a business, the transaction may consist of an entity sale or an asset sale. The type of sale can have an impact on tax liability and benefits for both sellers and buyers.
- Sole Proprietorship: Since a sole proprietorship has only one owner, the business itself cannot be sold, only the assets. The buyer can use these business assets to create any type of new business structure.
- Partnership: If a partner retires and distributes interests in the business to remaining partners, the operating agreement must be modified. Depending on state regulations, the partnership may need to file the ownership change with the state government.
- Limited Liability Company (LLC): An LLC's operating agreement will specify buy-sell and ownership transfer provisions. If there is a change of ownership, the LLC must draw up a new operating agreement.
- Corporation: Both C and S corporations base ownership on shares owned. The main difference is that C corporations have no limits on the number of shareholders, while S corporations cannot have more than 100 owners.
Outstanding Legal Representation in Cedar Rapids
There can be many moving parts to the negotiation, drafting, and execution of a sale or transfer agreement and in overseeing its closing. At Howes Law Firm, P.C., our business attorneys are well-versed in this complex matter. We can apply decades of experience to help you bring your sale or transfer to a successful conclusion.
Talk to one of our accomplished Cedar Rapids attorneys about your sale/transfer today by calling (319) 264-2922.
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