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Sale of business to children

Discussion in 'Accounting, Tax & Legal' started by scys, 21st Jun, 2008.

  1. scys

    scys Member

    Joined:
    31st May, 2008
    Posts:
    8
    If I want to sell my business to 2 of my children, what are some factors that I need to consider?
     
  2. MattR

    MattR Well-Known Member

    Joined:
    23rd May, 2007
    Posts:
    229
    Location:
    Sydney
    Some possible factors in no particular order;

    On a pragmatic business level
    1. stamp duty, ad valorum duty will most likely be payable on the fair market value of the business
    2. if the business is held in a company, will you sell the goodwill and keep the company or will you sell the shares in the company
    3. capital gains tax - if sold for a gain, can you acces the Small Entity CGT concessions
    4. if in a company, do you have any continuing liability issues - eg. PI insurance, directorships

    On a more personal level
    5. are you're kids up to it
    6. do you want to put the stress of running a business on them
    7. could they tarnish your reputation
    8. if $ involved is your estate in order if one child (for instance one not buying the business) feels that they didn't get a fair distribution


    Good luck