You have been working for years now and you are thinking of selling your business. The first thing to do is to look for a very good attorney and also an accountant who will come in handy for the paperwork. Whether it is an established business or a startup you do not need to worry. Here are some of the things that you need to know before you purchase a business in California.
Purchase the assets not the business
Do not even attempt to purchase the stocks in the business if the one selling the business is a corporation. Rather, plan to purchase the business assets and create a different company to play the role of the buyer. This is because of two reasons, one, the tax on the assets you will purchase will be dictated by the amount of money you bought the assets by giving you good tax dealing. Two, you will not shoulder any liabilities the one selling you the business has from debts or court cases if you purchase the business assets.
Talk to A number of brokers
You should check the list of agents and brokers in the CBBD (California Business Broker Directory) and contact them together with your demands from locations, net income, prices etc. of the type of business you are looking for. Be sure to get the brokers a profile of the buyer together with a Non-Disclosure and fax or email them with a confidentiality agreement. You should keep in touch with all the brokers frequently and you can also post an announcement – Business Wanted- the active and quick ones willing to purchase normally get the best business for sale. These factors will make your endeavors successful in buying a business in California.
Who will deal with the money received?
It is very possible that there could be some clients whom the seller owes cash and by the time the seller leaves the business after the sale, it is crucial to be aware of who will take the responsibility of receiving the debts which are overdue. You can decide to buy the accounts of the seller at the close of business at a discount to disguise to the client that the owner won’t pay or allow the seller to at his own pleasure receive the debts. A good advice for you is to purchase the said accounts receivable when it closes in case the felonious client is in need of further work done long after closing, you will stand in a better position for bargaining.