B. Negotiation When the non-binding or non-binding offer is accepted, it is customary (even if it is not universal) for the buyer to prepare a draft contract like this. Make sure your lawyer reviews each agreement before sending it to the other party for trial. The distribution of the purchase price between the items to be purchased is a matter of negotiation. As a general rule, the IRS accepts an allowance in armament length operations, but retains records to support the final allocation. The buyer is often most concerned about the allowance to maximize tax deductions for expenses and depreciation by purchasing assets. Tax consequences are generally an important aspect of any sale or purchase for both parties. These are some areas to consider: Internal Revenue Section 453 allows «non-market» sellers to use this deferral method to distribute tax payments on the profits of the sale. It cannot be used for the sale of stocks. At least one payment must be made after the end of the fiscal year in which the sale takes place. If the buyer is not an individual contractor, the buyer must determine the type of business that can be created to own the business: partnership, company (including «S- Corporation») or limited liability company. The seller should also consider tax strategies. For business sellers, the tax code provides, for example, that shareholders can benefit from tax breaks through a complete liquidation after the sale of assets.
See the internal recipe code sections 331 and 337. If a business seller has significant operating losses, a buyer may prefer a stock purchase. This allows the new owner to take over the existing business and, if profitable, provide a safe haven with the old losses. Find out if return credits or conference credits are available. Discuss this with an accountant or lawyer. The seller insures and guarantees to the buyer, and the successors and beneficiaries of the buyer`s assignment (representations, guarantees and alliances that survive the conclusion) as follows: A. The seller is a properly organized, valid and in good condition according to the laws of the state and is qualified as a foreign unit and in good condition in all cases where necessary. B. The seller has the full power and power to execute and execute the agreement and complete the proposed transactions.
The implementation, provision and implementation of this agreement has been duly approved and approved by these executives, directors, shareholders, partners and/or board members, as required by existing laws and instruments, agreements and documents to control the buyer`s governance. C. The seller has provided the buyer with a list of the seller`s executives, directors, members, partners and/or shareholders, and the seller will immediately notify the buyer of any changes to its senior executives, shareholders or directors at or before closing. D. The seller`s balance sheet («balance sheet») based on – and the seller`s profit and loss account are attached in Appendix E. The balance sheet and the income statement were based on the balance sheet and the balance sheet fairly presents the seller`s financial situation and reflects all assets, real estate, liabilities and liabilities of the seller, found or conditional (including the appropriate provision for all taxes); and the profit and loss account fairly represents the seller`s results for the period it covers. At the time of the balance sheet, the seller is responsible for any kind, whether in absolute, contingent or otherwise, undisclosed, fully reflected or reserved for the balance sheet. E. Unless otherwise stated in writing by the Seller, the Seller`s assets and characteristics are not at the time of this Agreement and, as of closing, they will not be, subject to the rights of pawn, charges, claims, clouds, commissions, shares or imperfections of any kind.