Do you want to own your own business but don’t want to deal with the startup costs such as building an inventory and a customer database? Buying an existing business may be the option you are looking for. There are some pitfalls to watch out for, however, so we’re about to provide you with 4 tips to help ensure a smooth transfer of ownership.
Tips for Buying a Small Business in California
Buying an established business can be a great shortcut to becoming a small business owner, but here are a few things to keep in mind:
- Obtaining a Seller’s Permit – If you are going to be running a business in California that involves selling goods (even if it’s just a seasonal business), you need a seller’s permit. The current business owner may have one, but that doesn’t transfer to you, so you will have to get your own.
- Examining Financial Documents – First of all, you need to know if the business makes money and what expenses are like. You also want to see tax returns. This will help ensure that you are not buying into a business with an existing tax debt you will have to pay.
- Examining Business Contracts & Agreements – This includes employee agreements and customer agreements. For example, if there is a privacy policy in place, does it prevent the current business owner from selling you a customer list?
- Acquiring Intellectual Property – When you acquire a business, you also need to get the rights to patents, copyrights, trademark, and other intellectual property that does not automatically transfer. This will allow you to continue using company logos, proprietary software, and other intellectual property associated with the company.
The Benefits of Hiring a Business Attorney
If you are purchasing a business in California, it makes sense to enlist the help of a business attorney to ensure that all of the abovementioned factors are handled properly along with the many other things involved in the transfer of business ownership. Pokala Law APC will be happy to help you get your business off to a good start. Contact us today by calling 844-878-5815.
