4 Things To Consider When Selling Your Business

You might be selling your business because you're ready to retire, because you want to pass it down to the next generation, or perhaps because you have just moved on and you want to pursue different business opportunities. There are some really key items that you're going to want to start thinking about.

Are you structuring your sale through assets or shares?

So goes the old saying, acquire assets, sell shares, with the notion being that it is somewhat more tax beneficial to purchase shares and slightly more tax advantageous for the seller to sell their shares. On the asset side, the rationale for this was that there used to be certain tax factors connected with a company's goodwill that made it highly favorable for a purchaser to buy those assets; those advantages are no longer as important as they once were. However, on the selling of shares, this is still very much the case. Because in Canada, there is a provision known as the lifetime capital gains exemption, which allows you to deduct up to $850,000 of the capital gain on the sale of your business. That is the price difference between the adjusted cost base, or the original purchase price of the firm, which is frequently minimal if you founded it yourself, and the real exit price. If you were able to take full advantage of the lifetime capital gains exemption on the sale of your company, and your company was worth $850,000.

When you are looking to incorporate a company in B.C., you need to really consider what you are going to name the company. There are two options when it comes to naming a company In B.C.

1.Numbered Company

The first option is to have a numbered company. Here, the corporate registry assigns a number followed by ‘B.C. Ltd.’. The assigned number is the incorporation number assigned to the company, so an example of a numbered company could be 1234567 B.C. Ltd.

5 Professionals to Consult Before Starting Your Small Business

There are many important steps that need to be taken prior to starting a small business. Consulting with professionals can help prevent negative legal consequences for you and your business down the line. Here are some of the most important professionals you should consult before starting your business.

1.An Accountant

Prior to starting a small business, it is important to have your finances sorted and learn about taxes, both of which an accountant can help with. An accountant will also be able to review your business plan and budget and ensure that your numbers are all correct.

Your accountant can also be a trusted advisor as your business grows. He/she may be able to help you think over opportunities that present themselves along the way.

Advantages and Disadvantages of Buying a Small Business

Starting a small business can be an exciting time with the potential for great success. However, starting from the ground up is not your only option; you can also purchase an existing and established small business. This may seem like the more attractive option for some, but it is important to consider all of the Pros and Cons of Buying a Small Business and a few of them are discussed below.

Advantages

1. Everything is already set up

A lot goes into starting up a business, but most of the start up work has already been done when you are purchasing an existing business. You will be acquiring a business where there are suppliers in place, staff is trained, and procedures and protocols already exist. This can make the transition much smoother while you adjust to the new business. This seems much more attractive when compared to starting up your own business because you will have to invest a lot of time and money in order to get to this point.