How do I - Transfer business ownership (incorporate, lender, borrow)

[foster3097]

My sister and brother in law are taking out an SBA loan for me to buy an established business. Everything will be in their name because they are taking out the loan. They don't want the business, they are just doing this as a favor for me. They don't mind their name on the SBA loan. I need the business in my name so I can transfer utilities, get licenses, insurance, ect...

They are buying the assets of the business, good will and the name of the business. I am assuming the at they will be a sole proprietor when all this goes through? They don't want to incorporate, but I will.

How do we go about getting the business from their name into mine?

Thanks!

[Kenlew]

PUT EVERYTHING IN WRITING...PUT EVERYTING IN WRITING...PUT EVERYTHING IN WRITING! No matter how good intentioned everyone is in the beginning, issues WILL arise. Have a written agreement that spells out everyone's responsilibilty. Define how the profits will be split, what happens if the business fails (loan repayment), etc. I would spend a little money and get an attorney to help with agreement. Even if you can't afford for the attorney to do a full blown agreement, you and your sister/BIL should at least write up your own agreement.

[FarNorthDallas]

You need an attorney.

[NinaN]

Originally Posted by FarNorthDallas

You need an attorney.

!!!!!!!!!

[cpg35223]

Originally Posted by foster3097

My sister and brother in law are taking out an SBA loan for me to buy an established business. Everything will be in their name because they are taking out the loan. They don't want the business, they are just doing this as a favor for me. They don't mind their name on the SBA loan. I need the business in my name so I can transfer utilities, get licenses, insurance, ect...

They are buying the assets of the business, good will and the name of the business. I am assuming the at they will be a sole proprietor when all this goes through? They don't want to incorporate, but I will.

How do we go about getting the business from their name into mine?

Thanks!

DISASTER ALERT.

Don't do it.

Only an idiot would take out a loan for somebody else's business. Aside from the fact that they won't be able to control how and when the loan will be paid, they are on the hook for the money regardless of whose name is on the business papers. No lender on the planet will allow transfer of responsibility.

Second of all, the ownership issues are already murky and you haven't even signed on the dotted line. Let me get this straight. They own all the assets, but you own the biz? How the heck does this work?

If you value your relationship with your sister and BIL, I would shelve this idea right now and get an alternative source of funding. And if you have to rely on family to get the capital for you, then how strong are your personal finances for the long haul in the first place? It takes a couple of years for most businesses to turn a profit, yet you already need somebody else to borrow money on your behalf. That doesn't sound like a winning proposition to me.


Oh wait. This thread is three years old. How the heck did it surface again? I'm presuming that the OP is probably living out of a Westinghouse carton by now and isn't on speaking terms with his sister.

[Doyle33]

Thanks for sharing information.
It is important topic and contain wide problem . I suggest to contact with any business lawyer they solve your problem easily.