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Can a proprietorship business be bought and sold? Is

Can a proprietorship business be...
Can a proprietorship business be bought and sold?
Is proprietorship business considered to be legal entity?
I am the seller and have separate tax id for this my healthcare small business..A buyer gave me $X as earnest money to purchase my business. He was supposed to give me remaining balance $YY withing 30 days. On the spot, an informal hand written agreement on a piece of paper was written and we both singed it. Detailed contract was supposed to be written by an attorney later on.After 30 days, they changed their mind stating that they did not know that my business is proprietorship.
Question of type of business, proprietorship or LLC, or Corp. never came up when he gave me the initial money and signed the informal purchase agreement. Now they want their $X back.I think, this was a breach of contract on their part and I have the right to keep the $X.
I think I can even ask them to pay for any additional losses that I will incur due to finding a new buyer and the delay.I also found out that this buyer is under non-competing agreement with another party. We all are in the same type of business.Please advice.
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Answered in 27 minutes by:
12/16/2017
Law Educator, Esq.
Category: Business Law
Satisfied Customers: 124,424
Experience: All corporate law, including non-profits and charitable fraternal organizations.
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Thank you for your question. I look forward to working with you to provide you the information you are seeking for educational purposes only. Please feel free to ignore any phone service request, the expert does not send those unless asked by customer and they are sent by the site automatically.

A sole proprietorship can be sold like any other business. A sole proprietorship is an unincorporated business entity. So the owner of the sole proprietorship can sell their business, which essentially would be their book of business and contracts and assets. The EIN would need to be submitted as a final tax return because it is tied to the sole proprietor's SSN and the new owner would need to apply for their own EIN.

If you had a signed agreement, they can be forced to honor that agreement even if a more detailed contract was never finalized. IT would be a breach of contract and you can seek specific performance or damages you incurred based on their breach and could seek to make them forfeit any deposit based on their breach.

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Customer reply replied 5 months ago
Which government organization, or regulatory commission, define and classify businesses? Is it IRS or some other agency?According to the buyer, they could transfer healthcare service provider NPI (National Provider ID) form incorporated entity to their corporation but they can't do the same from Proprietorship business to their corporation.
In addition, according to the buyer, specially the contract we (my proprietorship business) have with various payers, such as Medicare, Medicaid, Aetna, Human, Cigna etc. can't be transferred from proprietorship business to their corporation but could be transferred from the seller corporation to their corporation.

Thank you for your reply.

When it comes to an NPI, you cannot transfer the NPI from an individual to a company because you had to apply for your NPI using your SSN even if you had a tax ID number. However, that does not mean you cannot sell your sole proprietorship, it just means you cannot transfer your NPI to the company.

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Customer reply replied 5 months ago
Which government organization, or regulatory commission, define and classify businesses? Is it IRS or some other agency?

Thank you for your reply.

The secretary of state is where you apply for your business to register as an LLC or a S-Corporation or C-Corporation. As stated before partnerships and sole proprietorships are not registered entities.

Please do not forget to leave positive feedback by clicking on the 5 stars at the top of your page, as the experts are not employees of the site and get no credit for spending time with customers unless they leave positive feedback. Thank you.

Law Educator, Esq.
Category: Business Law
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Experience: All corporate law, including non-profits and charitable fraternal organizations.
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