The sixth article in a series on the purchase and sale of a Maryland business. In this article I address business sale issues relating to employment agreements and related documents, including confidentiality and non-compete clauses.
A business transfer’s success or failure often depends upon retaining the company’s employees and their knowledge of the business. Many times, a company’s most valuable employee is its soon-to-be former owner. Further, the buyer must consider the company’s obligations to the employees and consider whether employee departures could harm the company. Of course, the seller showing confidential company information to prospective buyers has concerns as well. Continue reading “Buying or Selling a Maryland Business – Employment Agreements”
The fifth article in a series on the purchase and sale of a Maryland business. In this article I address issues relating to transferring assets during a business sale.
When purchasing a Maryland business, the buyer must ensure all desired assets are properly transferred regardless of the chosen sale method. As discussed in earlier articles, attorneys will consider many issues when deciding to structure a sale as either an asset sale or a stock sale, including tax and liability issues. When utilizing an asset sale, the transferring documents must reference and account for all assets purchased. Even if the attorney structures the transaction as a stock sale, the buyer should confirm the purchased company actually owns the desired assets.
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The fourth article in a series on the purchase and sale of a Maryland business. In this article I address the importance of ensuring necessary commercial leases are preserved following a business sale.
For many businesses, the business location is its most valuable asset. This remains true even if the company only leases the location. Therefore, maintaining the right to use the property following the transfer is of utmost importance. If the lease is valuable to the buyer, it should not be assumed the seller has the right to sublease or assign the lease to the buyer.
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The third article in a series on the purchase and sale of a Maryland business. In this article I address basic tax concepts and issues relating to a business sale.
A major consideration when purchasing an existing Maryland business should be minimizing the tax burden. Certain transactions provide tax benefits to either the purchaser or the seller while providing a tax burden to the other. Therefore, tax consequences should be considered when determining the appropriate purchase price. The general rule is that the sale of a business is a taxable event; however, the parties may be able to structure the transaction using a tax-free reorganization. The IRS provides several forms of tax-free reorganizations, but to qualify the parties must meet numerous requirements. Since the IRS only allows tax-free reorganizations under limited circumstances, I will first discuss taxable transactions.
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The second article in a series on the purchase and sale of a Maryland business. In this article I address the possible liabilities that may be passed to buyers and sellers.
Parties seeking to buy or sell a Maryland business must consider both known and unknown liabilities. Certain business lines obviously raise more concern for liabilities than others, but you need not purchase a former asbestos company to inherit exposure. If a buyer purchases a company without considering potential liabilities, the buyer may purchase the seller’s potential lawsuits and contractual liabilities with no recourse against the seller. In addition, many regulatory and tax liabilities may pass to subsequent purchasers and put company assets at risk.
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The first article in a series on the purchase and sale of a Maryland business. In this article I address the basic concerns of buyers and sellers and the general transaction forms available to structure a business transfer.
Buying or selling a business can be a very exciting time but can turn into a nightmare if not planned correctly. There are many things to consider, including what structure the transaction will take. A list of typical structures include:
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The Maryland Tax Amnesty for 2009 officially ended on October 30, 2009, but if you missed the deadline you may still be able to negotiate payments and reduce your penalties for past due taxes. For instance, you may be able to use a Voluntary Disclosure Agreement. Please contact my office for more information.
The 2009 Maryland Tax Amnesty bill was signed into law on May 7, 2009, but the Maryland Comptroller’s Office will need to consider certain policy issues regarding its implementation. One obvious question Maryland tax attorneys and tax accountants are asking is, “What if you file prior to the Maryland Tax Amnesty period?”
Continue reading “2009 Maryland Tax Amnesty Summary”