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