I read a great article today on tax issues that arise when selling your business. I found the article on Yahoo Finance. Tax Implications of Selling a Small Business by Mark Henricks points out different ways to structure your deal. The author explains 4 major parts to look at when selling your business or structuring your exit plan.
1. How Business Sales Are Taxed
2. Asset Allocation
3. Deal Structure
4. Corporate Stock Sales
What really struck me is the is his explanation of how the sales are taxed and how much of your sale price will end up going to the government. He explains that it is not the sale of a single asset but rather all of your assets are being sold individually.
Use the expertise of your advisors to model the sell transaction before your enter the market. This will enable you to make fully informed decisions on how to proceed. A quality business broker can perform an analysis to help you understand what your business will sell for. A strong CPA can model the tax implications of that sale. A financial planner can provide options to appropriately invest the proceeds and a business attorney can outline the legal implications. All things you should understand before going to market to sell your business.
Arthur Kaempffe is the President of Klassen Ingalls. He has a broad skill set including finance, marketing and sales, mergers and acquisitions, operations management, and organizational development. He has owned, bought, sold, and built businesses. Arthur is committed to maintaining the client-centric approach that differentiates Klassen Ingalls in the business brokerage/intermediary marketplace. Read more about the people at Klassen Ingalls.