After cultivating a successful business in Newport for many years, the time may come when you want to retire. At this point you may be considering closing, selling or transferring your business. If so, you will want to know some basic points on what to do when it comes time to bow out of your business and close it, sell it to a new owner or transfer ownership of the business.
How to close your business
If you have articles of incorporation you will want to first look to them for direction on how to close. If you have a partnership, your co-owners must agree to the closure. You will also need to file dissolution documents if your business is an LLC or corporation. You will need to cancel registrations, permits, licenses and business names used by your business. Ensure you comply with state and federal employment and labor laws regarding employee payment upon closing as well as paying appropriate taxes upon closing. Resolve any other financial obligations you may have. Finally, keep business records for at least three to seven years.
How to sell your business
If you decide to sell your business, one of the first steps you will need to take is to obtain a valuation for your business. Common valuation approaches include the income approach where you consider anticipated revenue and possible risks. Another valuation approach is the market approach in which you compare your business to similar ones that have been recently sold. A third valuation approach is the assets approach in which you subtract all your liabilities from the total of all your business assets. Finally, you must prepare a sales agreement.
How to transfer ownership of your business
If you decide to transfer ownership of your business to another person or entity, such as a partner or family member, you have options for doing so. It can be an outright sale, a gradual sale or a lease agreement. Other options may be available as well.
Learn more about closing your business
All good businesses sometimes change hands or come to an end. It is part of commerce in Kentucky. You have many options for closing, selling or transferring your business that are worth considering. Careful preparation can be key to handing off your business into the best hands possible or executing a closing that meets your best interests.