Don't overlook these!
Updated for 2012
Your Role in Selling Your Business:
In addition to legal and accounting services that may be needed when you sell your business, you will have certain responsibilities to attend to as well.
Eight things you may need to do:
1) Notify your creditors:
The Bulk Transfer provisions of Article 6 of the Uniform Commercial Code and the Bulk Sales Acts (a class of statutes to protect creditors) both address notification to creditors of an impending sale of inventory sold in bulk and not in the ordinary course of business.
These notification rules generally do not apply to service businesses because the sale of merchandise is not the major source of income.
The purpose of the notification requirement is to protect creditors from being defrauded by the secret sale of retail inventory in bulk.
The idea is to keep you from pocketing the money from a bulk sale of your inventory then disappearing and leaving your creditors holding the bag.
2) Business bank account(s) and direct debit arrangements:
After all payments have cleared your bank, you'll need to close your business accounts and cancel any business-related direct debit arrangements that exist.
A final bank reconciliation should be performed.
3) Business insurance:
Cancel unnecessary business-related insurance policies. For example, workers' compensation insurance (if you had employees).
4) Business services:
Cancel any business services no longer needed (e.g., janitorial services, etc.).
Ensure that your taxes are up to date, including employment taxes and sales taxes (if any).
6) At year end:
7) Employment taxes at year end:
This applies if you had employees.
A sole proprietor is not considered an employee of his/her own business except for retirement plan purposes. For example, if you se up a SIMPLE plan you are considered both and employer and employee for the purpose of making plan contributions for yourself.
Make sure you keep copies of every document related to the sale of your business in a safe place.
In an outright sale, keep such documents at least three years after the due date of your return, or the date you filed your return that includes the sale of your business, if later than the original due date.
If you sold your business on an installment basis, keep your records for a least three years after the year the final payment is received and you filed your tax return which includes the interest income and gain recognized on the final installment payments.
Copyright © 2008-2013 Larry Villano. All rights reserved.