Growthlaw.com

Bill Price can help your business by developing or reviewing your employee,
contractor, and subcontractor contracts; business sale/purchase transactions;
and property lease or purchase agreements.
He can guide you through all aspects of your business transactions.

Add GrowthLaw to your team and help your business grow!

Buying/Selling Businesses

Are you wanting to cash out of the business you now own and run? Or are you looking to expand your current company by purchasing a related business?

Either way, let GrowthLaw guide you through the process, finding buyers or sellers with the help of business broker contacts, suggesting options for structuring financing to facilitate the property transfer, and overseeing all the details of the actual purchase/sale closing so you get your money or your new business as quickly as possible with no troublesome loose ends.

Business money still available:

For capital formation advice, write wprice@growthlaw.com

What are Small Business Investment Companies
and why should you
know about them?

The Small Business Administration (SBA) licenses and helps fund Small Business Investment Companies (SBICs) and Specialized Small Business Investment Companies (SSBICs). More than 400 such companies in business today total over $21 billion of funds under management. SBICs and SSBICs must confine their lending and investment to companies meeting the federal definition of a "small business." This capital can supplement the money your business brings to a deal, allowing the 1:1 debt-to-equity ratio banks require to make loans to small or newer businesses.

SBA 504 Program

The SBA guarantees long-term "504 loans," written through community development corporations (CDCs) that specialize in such lending, for machinery and equipment and for buildings. The 270 CDCs nationwide typically grant  loans on projects that include

--a loan secured with a senior lien from a private-sector lender to cover up to 50% of the project cost
--a loan secured with a junior lien from the CDC (backed by a 100% SBA-guaranteed debenture) covering up to 40 percent of the cost
--and a contribution of at least 10% equity from the small business being helped.

Using SBIC or other equity sources may reduce the amount of loans needed. 

SBA 7(a) Lenders

SBA lending divisions of national and regional banks, and/or SBA-certified local banks, are the primary initial contacts for companies seeking loans for business startup, operations, or expansion. Loans can be provided for up to $2 million, of which 75% would be government guaranteed. Other 7(a) program criteria must be met in applying for the SBA guarantee, in addition to any general requirements of the commercial lender.

Final reports to close a business: 
A checklist

1. Find all accounts payable, accounts receivable (amounts, when due, contact information).
2. Invoice for all accounts receivable, set closing date for reasonable time after moneys expected to come in.
3. If cash is available to pay due bills, pay them. If not, but the business owns other available assets, realize on assets and pay all non-termination bills.
4. Prepare all final tax returns, in addition to closing-specific reports (see below).
5. Set aside a reserve for private closing costs and governmental charges due.
6. Prepare final report of assets, liabilities, reports made, and balance due to each owner after all payments have been realized and paid, taxes and reporting done, and costs of closing covered.
7. Issue final distribution checks.
   

2.   Governmental reports due:

a. IRS Tax Checklist (from www.irs.gov):

• Make final federal tax deposits
• File final quarterly or annual employment tax form.
• Issue final wage, withholding info to employees
• Report information from W-2s issued.
• File final tip income & allocated tips info return.
• Report capital gains or losses.
• Report partner's/shareholder's shares.
• File final employee pension/benefit plan.
• Issue payment information to sub-contractors.
• Report information from 1099s issued.
• Report corporate dissolution or liquidation.
• Consider: Allow S corporation election to terminate?
• Report business asset sales.
• Report the sale or exchange of property used in your trade or business.

b. State checklists:

• Illinois Dept. of Employment Security: Prepare/file Form UI-2600, Request for Letter of Clearance
• Illinois Dept. of Revenue: Prepare/file Form CBS-1, Notice of Sale or Purchase of Business Assets
• Prepare/file final income tax returns (individual and organizational).
• Secretary of State, Department of Business Services: Domestic corporations file BCA-12.20, Articles of Dissolution. Out-of-state (foreign) corporations file to dissolve in home state, file BCA-13.45,Application for Withdrawal and Final Report, in Illinois
  

1. Domestic LLC: file LLC-35.15, Articles of Dissolution; Note also: LLC-37.25, Articles of Merger; . Foreign LLC: LLC-45.40, Application for Withdrawal-Foreign
2. NFP, LP, etc... have different forms.
3. Note: For nonprofits, Attorney General’s Office reports to Charitable Trusts division required

• Industry-specific regulators (e.g. Ill. Commissioner of Banks & Real Estate, Ill. Dept. of Professional Regulation) have specific termination reports, forms.
• Local governments (e.g. Chicago Department of Revenue) may have final report/withdrawal forms, such as water department clearance for Chicago real estate sales, to verify all bills were paid.