Many moving parts exist when selling a business and transferring its ownership. With lots of details to wrap up before the company’s new owner can take over, the process can seem overwhelming. The steps involved in legally handing over a company to someone else can vary depending on the type of business entity, where the business is located (rules vary by state), and other factors. In this article, I’ll touch on some of the nuances of business structure and then provide a handy checklist of common tasks to tackle when selling a company.
What Happens to Your Business Structure in a Sale?
Sole Proprietorship
Because a sole proprietorship is not a registered business entity and has no legal or tax separation between the business and its owner, the company’s assets may be sold, but not the business itself. Any remaining debts or liabilities cannot be passed on to the new owner. When a sole proprietor ceases doing business, there is no legal business entity to dissolve. However, the business owner must take care of other things to close the business and wrap up its affairs, such as canceling licenses, permits, or DBAs.
Dispatches From The Front 