Massachusetts Agreement for Sale of Business by Sole Proprietorship to Limited Liability Company

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Multi-State
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US-04320BG
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Word; 
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Description

The sale of any ongoing business, even a sole proprietorship, can be a complicated transaction. The buyer and seller (and their attorneys) must consider the law of contracts, taxation, real estate, corporations, securities, and antitrust in many situations. Depending on the nature of the business sold, statutes and regulations concerning the issuance and transfer of permits, licenses, and/or franchises should be consulted. If a license or franchise is important to the business, the buyer generally would want to make the sales agreement contingent on such approval. Sometimes, the buyer will assume certain debts, liabilities, or obligations of the seller. In such a sale, it is vital that the buyer know exactly what debts he/she is assuming.


In any sale of a business, the buyer and the seller should make sure that the sale complies with any Bulk Sales Law of the state whose laws govern the transaction. A bulk sale is a sale of goods by a business which engages in selling items out of inventory (as opposed to manufacturing or service industries). Article 6 of the Uniform Commercial Code, which has been adopted at least in part by all states, governs bulk sales. If the sale involves a business covered by Article 6 and the parties do not follow the statutory requirements, the sale can be void as against the seller's creditors, and the buyer may be personally liable to them. Sometimes, rather than follow all of the requirements of the bulk sales law, a seller will specifically agree to indemnify the buyer for any liabilities that result to the buyer for failure to comply with the bulk sales law.


Of course the sellerýs financial statements should be studied by the buyer and/or the buyerýs accountants. The balance sheet and other financial reports reflect the financial condition of the business. The seller should be required to represent that it has no material obligations or liabilities that were not reflected in the balance sheet and that it will not incur any obligations or liabilities in the period from the date of the balance sheet to the date of closing, except those incurred in the regular course of business.


This form is a generic example that may be referred to when preparing such a form for your particular state. It is for illustrative purposes only. Local laws should be consulted to determine any specific requirements for such a form in a particular jurisdiction.

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  • Preview Agreement for Sale of Business by Sole Proprietorship to Limited Liability Company
  • Preview Agreement for Sale of Business by Sole Proprietorship to Limited Liability Company
  • Preview Agreement for Sale of Business by Sole Proprietorship to Limited Liability Company
  • Preview Agreement for Sale of Business by Sole Proprietorship to Limited Liability Company

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FAQ

LLCs offer more protection, tax benefits, and other advantages that make them worth considering as business entities. by Michelle Kaminsky, J.D. If you currently own a sole proprietorship and wonder whether you can change it to a limited liability company (LLC), the simple answer is yes.

Starting an LLC in Massachusetts is EasySTEP 1: Name your LLC in Massachusetts.STEP 2: Choose a Resident Agent in Massachusetts.STEP 3: File the Massachusetts LLC Certificate of Organization.STEP 4: Create a Massachusetts LLC Operating Agreement.STEP 5: Get a Massachusetts LLC EIN.5 days ago

An LLC operating agreement is not required in Massachusetts, but is highly advisable. This is an internal document that establishes how your LLC will be run. It is not filed with the state. It sets out the rights and responsibilities of the members and managers, including how the LLC will be managed.

More generally, any person who is required by state law to have a Massachusetts license before providing services should be able to form a Massachusetts PLLC for those services.

All LLC's should have an operating agreement, a document that describes the operations of the LLC and sets forth the agreements between the members (owners) of the business. An operating agreement is similar to the bylaws that guide a corporation's board of directors and a partnership agreement.

Professional services businessesMassachusetts allows professionals, such as accountants, attorneys and physicians, to form a professional limited liability companies (PLLCs).. After forming a limited liability company (LLC) , you must undertake certain steps on an ongoing basis to keep your business in compliance.

An SMLLC operating agreement offers various benefits, such as: providing rules that will supercede the default provisions of your state's LLC Act. serving as an additional document to show potential lenders regarding the organization of your business.

Steps to Changing Your DBA to an LLC:Determine If You Can Use Your DBA Name. States require LLCs to have a name that no other registered business uses.Choose a Registered Agent.Register Your New LLC With the State.Obtain an EIN.Open a New Bank Account.Dissolve Your DBA.Make Other Final Changes.Limited Liability.More items...?

AdvantagesMembers of a PLLC aren't personally liable for the malpractice of any other member.PLLC members are not personally liable for business debts and lawsuits, such as unpaid office rent.The PLLC can choose to be taxed as a pass-through entity or as a corporation.More items...

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Massachusetts Agreement for Sale of Business by Sole Proprietorship to Limited Liability Company