There may come a time when a small business owner in Saint Paul will need to hand the reins over to another individual or entity. According to the U.S. Small Business Administration, there are several options for transferring ownership of a business.
One way to transfer ownership of a business is through an outright sale. The advantage of selling your business in full is that the transfer of ownership takes place immediately and the former business owner is paid at once. Some people may choose this transfer of ownership if they are financially unable to keep running their business. An attorney can assist in an outright sale by ensuring that all necessary regulations are followed, as well as advise on tax matters and fulfilling any existing contracts.
Another way to transfer ownership of a business is through a gradual sale. This option may be good for buyers who are financially unable to buy the business outright but can handle a long-term payment plan. This also benefits the small business owner, who no longer needs to run the business but will still garner a regular income. Because there is legally binding paperwork and contracts associated with a gradual sale, it may help to have the assistance of an attorney to ensure that all documents are drafted correctly.
A third way to transfer ownership of a business is through a lease agreement. This can benefit the tenant, who will temporarily have rights to the business, per a written contract. It also benefits the business owner, who will receive regular payments from the tenant. Because a lease is legally binding, it can help to enlist the help of an attorney when drafting it to ensure it is legally sound.
As this shows, there are a variety of options available to small business owners who wish to transfer ownership of their business. There are legalities that must be followed with all these options. Therefore, it is important that small business owners understand the laws and regulations that will apply to the transfer of their business, so they can make appropriate business planning choices.