Sale/Transfer of Business

Ok, you’ve worked hard for a long time building your business – now it’s time to reap the rewards of all your hard labor. It’s time to either pass it on to the next generation (family or management) or sell the business to an outsider. I can help you in the transition. Here are some possible avenues that you might want to consider.

Sale/gift to Family

There are several estate planning vehicles available to minimize your taxes when you sell or give your business to your family. Which vehicle is best for you depends upon: (i) your need for cash during your retirement; (ii) your age and health (which affects the cost of life insurance on your life); (iii) your desire to maintain control of the business as long as possible; (iv) your net worth (estates under $5.45 million are not subject to estate taxes); and (iv) possibly a few other considerations.

Generally speaking, the sooner you put a plan into place, the better – because as you grow older, your options may become more limited. I can help you think through, design and implement the best plan for you and your family.

Sale to Outsider

If you are thinking of selling your business to outsiders sometime down the road, I can walk you through the factors that most affect the sales price, which might lead you to tweak your business strategy to capitalize on these factors. There are numerous ways to sell your business – the most common are:

  1. Sale to Management: Other than selling or giving your business to your family, I believe this is the best route to maximize your sale proceeds. If you have a management leader or team (teams are always better) that you trust will continue your legacy and successfully lead your business, then this option makes sense. This is a nice vehicle because banks are willing to lend money to the buyers and you can slowly sell ownership so that you can control the business during the transition. I can help you think through, design and implement the best plan for you and your family.
  2. ESOP (employee stock ownership plan): ESOPs are used to: (i) create a market for your business ownership, (ii) motivate and reward employees by letting them participate in the company’s success, and (iii) to take advantage of tax incentives. This is a very complex area of the tax law, which in many cases requires the help of an expert in the area. If necessary, I can help you find the right person to help.
  3. Strategic Purchaser: This is the next most desirable purchaser, because the purchase will likely generate synergistic results for the purchaser (meaning 1 + 1 = 3). Because the return to the purchaser will be greater than for a non-synergistic purchaser, the strategic purchaser will be willing to pay a higher price for your business than a non-strategic purchaser. Again, I can help you: (i) think through and seek out possible strategic purchasers; (ii) negotiate the deal; (iii) prepare the transaction documents; and (iv) afterwards, play a round of golf with you to celebrate!

Call me for your free consultation.


Small Business Services (click on your area of interest to be taken to that webpage):

  1. Small Business Law Overview
  2. Business Entities
  3. Business Start-Up
  4. Business Expansion
  5. Sale/Transfer of Business
  6. Dispute Resolution
  7. Board Member
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