9 Steps To Sell Your Partnership Business
Partnerships are a common event in the business world. They can be easily established with very few legal formalities in Canada. One of the main elements of setting up a partnership firm is Partnership Agreement. The partnership agreement comprises of the details regarding how the firm will be operated and what will be the share of each partner in the profits. It also contains the terms and conditions regarding selling of the partnership firm. Given below are a few steps regarding how to list your partnership business as business for sale:
- Assessment of Partnership Deed
A partnership deed is a set of terms and conditions that all the partners agree upon. The deed comprises of how the business will be run, how the business will tackle the situations, like sell of business etc. Keep track of any term or condition that may create hindrance in putting your business for sale.
- Meeting of Partners
In the next step, conduct a meeting between all the partners of the firm and every partner must vote on whether or not they should dissolve the partnership and sell all the tangible and intangible assets of the firm. If the partnership agreement does not offer any terms and conditions for how to go about dissolving the firm and sell the assets, the partners could follow the directions given by legal authorities of Canada. In general, to sell the complete business, every partner must agree to sell the firm.
- Sale of Assets
Third step is about deciding which assets must be sold. When partners in a firm decide to sell the business, they do not sell the partnership firm. Partnership is dissolved and the assets are sold. A partnership business might have many assets, both tangible and intangible. Depending on their future plans, the partners must decide which assets they want to sell.
- Paying Off The Business Liabilities
Repay all the business’s liabilities. At times, partners might individually cosign loans or other debt amount that are credited to the business name. Before selling the business assets, these debts must be paid off by the partnership firm.
- Business Evaluation
Get all the financial records of the firm in order and evaluate the present market value of the tangible and intangible assets of the business. If you and your partners are planning to sell intangible assets as well, it will increase the overall worth of the tangible assets would increase as well. There are many business evaluation methods, you can use to assess the right value of your business assets before putting it as business for sale.
- Find The Right Buyer
After evaluation, find the right buyer who would pay the right value for your business assets. You can also hire the business broker who will help you find the best potential buyers. You can hire the qualified business brokers from Businesses Buy Sell in Canada.
- Prepare and Sign The Purchase Agreement
Once you and your partners have found the right buyer for your business assets, and everything has been finalized, prepare a purchase agreement that will contain the details regarding the selling price and the buyer. Then the agreement will signed by all the partners, buyer and other parties involved, and then buyer will pay the purchase price.
- Closing The Partnership Accounts
After the sale of assets has been commenced, settle all the accounts of the partners under partnership. Close all partners’ accounts by paying off the due amounts to the partners and inform the local authorities about dissolution of the partnership.
- Review Taxation Amount
After closing all the accounts, calculate the tax amount from beginning of the year to the day when the partnership was dissolved, and then prepare the final tax return.