Well first, an LLP is a limited liability partnership
and you "wind it up" pursuant to your LLP agreement.
Business owners operating under a sole proprietorship or general partnership may form a new LLC entity at any time or join an existing one by establishing a limited liability company and start operating the business under the newly formed LLC.
Transfer all assets that are under the current business entity to the newly formed limited liability company with a bill of sale
. Include any tools, equipment, software, hardware and all items used in the previous business to the LLC.
After the LLC is formed and all assets have been transferred, terminate the old general partnership
or sole proprietorship by agreement of the LLP partners.
However, as to sale of the LLP and it's value - heck NO - I would NOT sign away my interest therein but get the LLP appraised by a CPA
and demand your interest OR don't sell out your interest in the company.
Yes, some partners contribute money - others contribute their time and effort. However, if the business is successful - one necessarily isn't worth more than the other.
So you need someone to evaluate the business's value and determine a value for the entire company and therefore, indirectly, your interest therein.
There is absolutely NO WAY I would just sign away my interest in the LLP without a professional evaluation or appraisal of it's value.
Value is driven by assets and liabilities, income, management, location, and all of the factors that make a business unique.
t could be said that valuing a business is as much an
as a science. There is no precise formula that applies to all businesses in all sectors, nor even to all businesses within a sector. Instead, an accurate valuation will depend on consideration
of a number of factors. These include:
- The size of the business - larger firms tend to be viewed as less risky and so attract a higher price, even if they are less efficient than smaller competitors
- The prospects for future growth - buyers sometimes pay more for businesses with high growth rates because they repay the investment more quickly. You might consider selling before turnover and profits level out
- Diversification - if you have a wide 'business mix' it can affect the sale price, since buyers may only be interested in one area or market
- Customer base - the size of your customer base is important, but so is the quality of your customers and the cross-selling opportunities
- Profitability - although generally the higher the profits, the higher the value, some buyers might prefer a business with areas in which large efficiency savings can be made
- Cashflow and financial management - the size and certainty of cashflow, and the strength of the balance sheet and financial management are all vital factors.
So, I would look for a local CPA to evaluate the business's value and then determine your interest in the business - thereafter, and only thereafter, would I agree to a sales price for your interest in the business.
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