A short guidance talk by Donna Genie about purchasing a family-owned business. Covers practical transition steps when buying assets from a family member—reestablishing accounts, setting up a new entity, due diligence timing, and using separate entities for legal protection and tracking business property.
Hi there. I'm working with a business owner who is purchasing an existing business from a family member and we are assisting this business owner in purchasing from their family. Now, they've already agreed on a sales price, which is a big enough issue there that many people struggle with. But as we approach that transition time, there are a lot of things to check off the list. As a new owner of that family business, you are most likely purchasing the assets of the business and you're going to start up your own entity for that process. You're. When starting your own entity, you'll need to re establish all of the accounts. And the owner that I'm working with today, we are looking at some due diligence. They're still about a month out from their transition date, so we want to make sure that we have all that information set up. A really important piece there is discussing the entity strategy and how they will operate that business. They'll operate both of those in separate entities so that they can track the business property separately. It's a good idea to do that for legal protection for one reason and that legally, if someone were to sue a business based on a faulty product or something like that.
