Ensure that the proper steps are taken to close a business, or transfer ownership to another party.
When it comes to planning, how you exit your business is just as important as how you start it. The goal is to maximize the value of your company before converting it to cash and minimize the amount of time consumed.
If you’re thinking ahead to the day when you’ll no longer run your business, think about these five exit strategies now so you’ll be prepared for your future.
Continuing a business beyond one generation of leaders requires planning. Whether through private shares transferred to a senior manager, or a leadership transfer to family members, a succession plan smoothes the way for continued business success.
A Chronology: A Road Map to Closing Down Your Business – Closing up a business takes more than just walking away. There are legal, tax, and financial matters which must be addressed. Use this resource as a guide to the steps an owner must take when closing the business’ doors.
Meeting with a Lawyer: Closing a Business – If you are closing any form of business other than a sole proprietorship, you will probably want to retain an attorney to determine the appropriate procedure for notifying various state authorities and the IRS of your intentions.
Checklist: Dissolution and Winding Up – Whatever the form of your business, you will need to follow an organized plan for closing your doors. Your plan, in most instances, will have to follow guidelines set forth in your state statutes, the Internal Revenue Code, and state and local tax authority regulations. This checklist is adopted from the Model Business Corporation Act and is specific to corporations.
There are several actions that are taken when closing a business.
File dissolutions, withdrawal or cancellation – A dissolution, withdrawal or cancellation needs to be filed with the Kansas Secretary of State’s office. All annual reports must be filed prior to filing the dissolution, withdrawal, or cancellation.
Complete the Notice of Discontinuation of Business – You need to notify the Kansas Department of Revenue when you close your business. This allows the department to close your account and stop sending forms for future periods. Failure to properly notify the Kansas Department of Revenue may cause unwanted correspondence or additional contacts for tax filing. If the department does not know you have closed your business you may be viewed as a non-filer owing back taxes.
When closing your business, consider the following actions from the IRS:
If you already have an Employer Identification Number (EIN), you may need to get a new one if either the organization or ownership of your business changes. If you incorporate a sole proprietorship or form a partnership, you must get a new EIN.
Business owners and other authorized individuals can submit a name change for their business. The specific action required may vary depending on the type of business. In some situations a name change may require a new Employer Identification Number (EIN) or a final return.
Generally, businesses need a new EIN when their ownership or structure has changed. Although changing the name of your business does not require you to obtain a new EIN, you may wish to visit the Business Name Change page to find out what actions are required if you change the name of your business. The information below provides answers to frequently asked questions about changing your EIN.
Deciding to sell a business you have founded, nurtured, and grown can be agonizing – or liberating. Owners choose to sell their businesses for many reasons, from retirement to a hope that new management can turn a greater profit.
A few rules apply: Hire an experienced appraiser, sell assets rather than the business entity, and don’t assume the buyer is in the chips.
The sale of a business usually is not a sale of one asset. Instead, all the assets of the business are sold. Generally, when this occurs, each asset is treated as being sold separately for determining the treatment of gain or loss.
In selling your business, consider these practical steps for making the process go smoothly.
Selling your business for the highest price is the result of years of dedication and persistence. Finding buyers for your business sale can be difficult if you aren’t in a hot industry or lack unsolicited offers. An option to gain access to a larger pool of buyers is to consider a business broker.
Only 30% of all businesses for sale that are put on the market are sold – a surprising statistic to most owners, agents, and business brokers trying to sell a business. If however you follow these steps and tips your chances of selling dramatically increases.
It is more than just important to know how, when, and how much to sell your business for. There is a big difference between properly preparing your assets to be sold and putting a for sale sign on the front door. Knowing the difference can pay big dividends.
Selling business assets, especially under trying or forced circumstances, can be difficult. However, knowing what to do and how to do it when it comes to selling company assets can help return the most value. You deserve to get as close to market value for your assets as possible.
The estate tax is a tax on your right to transfer property upon your death. It consists of an accounting of everything you own or have certain interests in at the date of death. If you give someone money or property during your life, you may be subject to federal gift tax. Find some common questions dealing with these issues.
At any given time, 40 percent of U.S. businesses are facing the transfer of ownership issue. Founders are trying to decide what to do with their businesses; however, the options are few. The
following is a list of options to consider (83 KB).
There are two common non-bankruptcy alternatives for a financially distressed business. The first is an out-of-court workout, which, if successful, would allow the business to continue to operate without court supervision. The second is an assignment for benefit of creditors, which is a vehicle for liquidating the business outside of a bankruptcy with minimal state court supervision.
Bankruptcy Basics provides basic information to debtors, creditors, court personnel, the media, and the general public on different aspects of the federal bankruptcy laws. It also provides individuals who may be considering bankruptcy with a basic explanation of the different chapters under which a bankruptcy case may be filed and to answer some of the most commonly asked questions about the bankruptcy process.
In filing for bankruptcy, there are several questions that you may have. The following list several questions and answers to assist in the process.
Bankruptcy proceedings begin with the filing of a petition with the bankruptcy court. The filing of the petitions creates a bankruptcy estate, which generally consists of all the assets of the person filing the bankruptcy petition. A separate taxable entity is created if the bankruptcy petition is filed by an individual under chapter 7 or chapter 11 of the Bankruptcy Code.
When maintaining your business, the following services are available:
NetWork Kansas FREE Referral Coordinators are available to provide the necessary resource referrals & business counseling to you throughout the business startup, growth and maintaining process. Live Support Chat Business Center Help
Kansas offers many educational events to assist with business startup, business plan development, taxes, government procurement, marketing and more. View seminars available in your region!
Find organizations that are available to help you start, grow or fund a business. Learn more and get connected to more than 400 organizations that are ready to help.
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