Existing Business Resources
may choose to sell a corporation for a variety of reasons. They may opt to do so because they have chosen to retire, change career paths, or follow another business venture, for example.
A small business owner has two options when it comes to how he or she can go about selling their company. One option is to sell the corporation's stocks and the other is to sell its assets, although generally business sales are structured through the latter option.
In the case of a C corp, an entrepreneur will see the purchase price taxed twice. Once will be when the sale is closed and the other will be when the cash is distributed among the shareholders. However, an LLC will only see its purchase price taxed once, the website Rasmussen Reports noted.
When selling a business, it is advised to consult a tax expert to assist with the red tape that accompanies the process.
"If you find you don't really want to sell your business, you have the option of reorganizing on a tax-deferred basis. This is one of the decisions you need to make as you draw up the provisions for selling your business," the website Dun and Bradstreet Credibility Corp noted.
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