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Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Business Law
Satisfied Customers: 41220
Experience:  Run my own successful business/contract law practice.
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A person has started their own business several years ago,

Customer Question

A person has started their own business several years ago, they now want to turn 100% of the business over to someone else, basically giving another person the business. Can they do this and are there any penalties?
Submitted: 5 years ago.
Category: Business Law
Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your question.

That very much depends. What type of a business entity is this? Is this a sole proprietorship, partnership, LLC, S Corp, LLP, C Corp?
Customer: replied 5 years ago.

sole propreitorship, LLC

Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

If the person owns a one member LLC, so long as they file the proper forms with the state where the LLC is currently registered and show the change in ownership, it is very much permitted. Businesses can (and do) change owners. The biggest liability for the incoming owner would be that he would not just take over the business benefits but also all of the liabilities and outstanding debts, interests, and obligations. This is why the incoming owner should very strongly consider retaining an accountant so that the accountant can review the numbers and see if there is anything the present owner has failed to state that may later come back to bite the new owner.

Good luck.
Customer: replied 5 years ago.
So if I am understanding your answer correctly, as long as the correct forms are file there is not a penality and they can just "turn the business over" to someone.
Expert:  Dimitry K., Esq. replied 5 years ago.
That is absolutely correct. There is no penalty, just fees for the forms, and of course the current owner would still be responsible to pay the portion of the taxes for the period of time when he owned the business. Otherwise there is no penalty for transfering ownership.

Good luck.
Dimitry K., Esq. and 2 other Business Law Specialists are ready to help you
Customer: replied 5 years ago.

Can you tell me the forms that need to be completed?

Expert:  Dimitry K., Esq. replied 5 years ago.
Most likely, sure. Could tell me in what state the current LLC is incorporated?
Customer: replied 5 years ago.

Sure, Kentucky

Expert:  Dimitry K., Esq. replied 5 years ago.
Thank you for your follow-up.

Here are the forms you will need:

Go to the link below for the fees, you will need at least $40 to file for an Amendment to the Articles of Incorporation that would show the new person as the owner:

http://www.sos.ky.gov/business/filings/fees/

Make sure to file KRS 136.060 for the business tax listed.

Here is the link to the actual amended form:

http://www.sos.ky.gov/NR/rdonlyres/99CB9BD5-A668-4E41-8916-637B3740A06F/0/AMDArticlesofAmendmentProfitCorporation.pdf


Good luck!