RCKnep3

I've run a business many times before for someone else, I was wondering to anyone that has bought an existing salon what all is involved in the transfer of ownership? The company is currently set up as a s Corporation which works well. The books are mainly done manually then entered into quickbooks after the fact. They have a system in place for pos directly into quickbooks but never bothered to set it up. I'll convert everything over if I purchase but will need to figure out FMV of assets at the time of sale. Anyone else gone through this that would like to share? Not the ongoing issues of a salon, just the transfer of ownership and establish a starting point for your books going forward.

Gidget

Legally a transfer of ownership is done when the owner gives the land or property to someone else. Then the papers have to be drawn to change the name of owner but no money is exchanged. Is this your case ?

RCKnep3

No this would be an exchange of money. From reading it would be considered an asset sale I believe.

navigatin1

Find a real estate lawyer and they will know how to draft up a sale contract.

Gidget

Then if its a sale you have to go thru a notary or like navigatin1 said a real estate lawyer.

engfant

Please. Shove gun barrel in said "buyer's" face, hand pen, take money, take off.

What could go wrong?

sunsally

Generally -- and I am NOT an attorney!! - an "asset sale" just involves your company buying their "stuff" :) (assets). You are not adding in anything for their company name, "goodwill", customer base, etc. - or if you are, you put a value on it like a hard asset. So you aren't buying their "s-corp" -- you are just buying what the s-corp owned.

That is relatively simple - with an attorney of course!

If you are buying their BUSINESS - the name, assets, etc it becomes more complicated, there can be more risks (e.g. what if a former customer of theirs sues them in a year for claimed overexposure - you could have that liability).


In this regard -- asset sale or otherwise -- consider if keeping the same name is going to HELP you - or hurt you. Sometimes a fresh start is BETTER - othertimes everyone already knows it as "xyz tan" and the reputation is good and you want to keep that going, just "under new management".

Either way - ensure you KEEP THE PHONE NUMBER - or at least get that number to tranfer to your new one. Lots of people keep outdated phone books, business cards, etc and you want them to still be able to get through to you!

Bottom line - see an attorney - and probably an accountant (mine is both!)!

Gidget

Great idea why didn't anyone think of that :)

lindaman

I bought my salon as an asset sale and I also sold a business as an asset sale that was an S-corp. if you want to pm me, I can tell you what we did. Its not that complicated.

caribbean tan man

i must be learning from sunsallys post.

i was going to recommend a asset purchase

possibly a name change or atleast structure change

but keep the same number

when i purchased my salon i didnt know enough to change the name, when the bill collectors started to call and bug me for the previous owners debt that i DIDNT purchase it was starting to become a pain in the arse. i had papers showing i bought the assets only but even my own city wouldnt let me get the required license at renewal because there was a unpaid tax balance on the BIZ name....i did something very simple which was advice from my accountant. i went LLC with the current name! something to think about in your case.

bill collectors where told oh sorry your looking for ray the owner of xyz im jay the owner of xyz LLC we just kept the same phone number....worked like a charm C YA!

seeing yours is a s-corp already u could go with your own s-corp then doing business as whatever the current name is.

but def consult a attorney first!

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