How to change ownership of a business? Follow

If you own a business and want to change its ownership, you should be informed that it is both a complex and lengthy process. There are so many reasons for you to change the ownership of your business. For instance, if you are retiring and wish to hand over your business to someone worthy.

Changing the ownership of a public company is much more complicated than a private one. Since we are talking about a private business here, let’s give you the details of the same.

What to do?

To change the ownership of your business, you need to take care of a lot of things.

• Get an attorney
  Without the help of an attorney, the task is impossible. You need to wrap up everything before the arrival of the closing date. You need to complete every task except for the dissolution of your company. An attorney can help you with all the legal procedures and documents.

• The fate of your business
  The dissolution of your business depends on what you want to do with it. For example, whether you want to end the business or transfer the ownership to someone else.

• Create important business documents
  To complete the process, you need to create a lot of important business documents. All this may be hectic for you and therefore, taking the help of an attorney is a must.

• Name change and bank change
  When changing the ownership of your business, there are chances that the new owner may want to change the name of the business. Along with that you also need to open new bank accounts.

• Assets and liabilities
  After the transfer of ownership, even the assets and liabilities need to be transferred to the new owner.

Thus, you can see how lengthy and the hectic process is to change the ownership of your business. But people still opt for it, if they have a valid reason to take such a decision.

Read more: What are the types of business ownership?

01.  AFTER years of putting in all types of efforts (physical, mental, financial, statutory compliance's, etc.... ) the business owner would want to change the Business Ownership for the following reasons:

a)  Retirement wishes of the Owner

b)  Running losses or Closure or Financial

c)  Change in Business

d)  Capitalizing in the Income Tax Returns

e)  Merger with other business

f)  Legal /Family /Business disputes or on amicable settlement

g)  Past Liabilities of Statutory Authorities & Pending Payments of Suppliers /Workers etc....

h)  Change of Business place or the Business becoming nonviable due to Market forces

i)  Harassment by various Statutory Authorities, Business Rival's

02.  The Business can be Sold /Transferred /Gifted, on "lock-stock-barrel" basis, which does not leave ANYTHING with the original owner,which means:

a)  All Propitiatory rights, Good Will, Copyrights, Formulas, Business strategies, Research Reports and so on....

b) Alongwith all Past & Future Assets, Liabilities, Good-Will, Territorial rights, Land & Machinery, Manufacturing formulas, Clientele and so on....

3. Existing Businesses can be Sold /Transferred /Gifted, SUBJECT to all liability clearance of Statutory Compliances (Income Tax, GST, local licenses and so on....)

a)  Clearance of Outstanding Statutory liabilities, Clients /Suppliers /Staff liabilities & dues,

b) This will also involve original owners undertaking for any liabilities till handover of Business.

4. A Registered Settlement /Declaration Deed has to be prepared clearly outlining the above with the Buyer party and the various terms and conditions of sale /transfer /gift of  Full or Part of Business.

Keep Smiling .... Hemant Agarwal

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