How To Transfer Private Business Ownership

Each and every one of us wants to have our own business, whether it's a big or small business. You might think that franchising is the best choice for you, because in franchising the potential risk is very small, since the product is already introduced to the market. You might also want to buy existing business from others that you think will prosper if you manage it by yourself. Buying an existing business from others will require a transfer of business ownership. There are different options available of transferring a business ownership to another person.

Sell it outright.  In selling your business outright, you will be paid immediately by the new business owner. This means that you will receive a onetime full payment from the new owner at the time of purchase. This method of transferring is good for the owner who is selling the business, especially if that owner needs the money urgently. This mode of transferring also ensures that everything is clean and considered a done deal once the money is given to the new owner. Your business is already yours and you are the new owner of your business. Whatever necessary changes and enhancement you want to implement is already in your hands. So be careful and make sure to think over all the changes that you want to implement in your new business.

Lease your business. When you decide to lease your business to another person, you need to find a lawyer who will draft the contract and your payment scheme method. This contract is very important to avoid problems that may arise along the way. In leasing your business to another person, you will receive a monthly payment from that person at the time of the effect of the contract. This method of transferring ensures the old owner is still on top of the business because all the terms and conditions still come from the old owner. If everything is smooth and you have no problem with the person who is leasing your business, you might want to ask that person to purchase your business after the period of leasing contract expires. This way you can prepare the new owner to handle your business.

Sell your business gradually. You can also sell your business gradually to another entity. In selling your business gradually the mode of payment is receive on instalment basis but this method of transferring requires you to look for a lawyer and have your lawyer draft your payment terms and conditions. If all the payments have been settled by the new owner, then you can transfer your business ownership to the new owner depending on what is written on the contract. 

Whatever methods you choose on transferring your business ownership to another person, it is important for you to know all the pros and cons of each method. Determining what method that is best for you will greatly benefit you and your business.


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