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Digg it UP - Business Sellers - Beware of the C Corp Asset Sale
Change of Residence Issues in Franchising Agreements ce our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary inIn this day and age when people change jobs every 3.2 years and change their life-time plan at least every six months or change spouses and get divorces more than anytime in modern history franchising companies must be careful to continually upgrade its data bases of its owners, outlets and their residences. South African Mining Companies and Mining Houses are Being Reevaluated We recently completed a Merger and Acquisition engagement to sell our client to a large publicly traded company. Our client had started her company 25 years ago and had set it up a C Corp. She never was advised to change that structure in preparation for a much better tax treatment on the sale of the business.South Africa holds the world’s largest reserves of gold (35%), platinum group metals (55.7%), manganese ore (80%) chrome ore (68.3%) titanium metals (21%). It also produces a large share of the world’s diamonds and mineral deposits.Lucrative opportunities exist for downstream processing and value adding o The buyer had an acquisition policy of only asset sales and no stock sales. The tax implications to our client were punishing. In a C Corp Asset Sale, there is no such thing as a long-term capital gain for the corporation. Since our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary in Create Dynamic Headlines For Your Advertising and Multiply Your Responses Virtually Overnight her company 25 years ago and had set it up a C Corp. She never was advised to change that structure in preparation for a much better tax treatment on the sale of the business.Done well, advertising can launch your business into a period of explosive growth. Done poorly, advertising can be one of the most wasteful and risky forms of marketing activity. Laser-like targeting and messaging with irresistible appeal are two crucial elements.Many b The buyer had an acquisition policy of only asset sales and no stock sales. The tax implications to our client were punishing. In a C Corp Asset Sale, there is no such thing as a long-term capital gain for the corporation. Since our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary in Foreign Franchising treatment on the sale of the business.As McDonald’s and Subway of the U.S. are experiencing wild popularity in the overseas market, foreign franchises like Pollo Campero and Jollibee are getting popular in the U.S. There is a great scope of foreign franchises in the country, as people want to try something new and adventurous.Want to Deal wit The buyer had an acquisition policy of only asset sales and no stock sales. The tax implications to our client were punishing. In a C Corp Asset Sale, there is no such thing as a long-term capital gain for the corporation. Since our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary in 6 Ways To Keep Your Mental Batteries Charged ations to our client were punishing. In a C Corp Asset Sale, there is no such thing as a long-term capital gain for the corporation. Since our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary inWhen you leave your car headlights on overnight, what happens?No power. You can’t get to work. You can’t even get out of the driveway. Your brain is like a car battery. If you let all the juice run down, you can’t function very well. Your brain tells your body that it just can’t handle anything Stop Shaking A Stick At Sales Training ce our client's basis (a software and consulting firm) was essentially $0, the entire sale amount would have been treated as ordinary income and would have been taxed at a rate of about 30%. Once taxes are paid by the corporation and a distribution is made to the stockholders, the stockholders are then taxed at the 15% individual long-term capital gains rate.I ran across a very insightful article in CLO Magazine today written by Tina Teodorescu (I had to cut and paste that one!). The article, “How Effective is Your Sales Training Program?” talks about the unique challenges of developing an effective training program for people that fund your payroll Let's say that the purchase price was $5 million. With an asset sale, the Corporation would first pay 30% of $5 million, or $1.5 million. On the distribution, the shareholders would pay 15% of the $3.5 million distribution or $425,000. The total tax paid is a whopping $1,925,000. Net proceeds to the seller are
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