I am in the process of purchasing a small Business and need all the help I
can get. The previous owners of the business classified their employees as
indepentend contractors. Therefore they did not pay employment taxs. I am not
sure this was legal and above board and I only want to get involved if I can
do this business legally.
I have a copy of the last 2 years P&L statements, but their taxes were not
filed in a timely manner and tax forms have been lost.
What advise can someone give me on finding a CPA to review these documents so
that I can determine if the business is even viable and protect myself from
any back taxes that might become due when the IRS discovers that the
employees have not had taxs filed correctly.
Or were they filed correctly???? I have looked at the IRS Section 530 info
but don't really understand it.
Should i have a lawyer and and accountant; before makeing a decision to put a
lot of money in the purchase of this business
The previous commentator provides sound advice certainly. I would recommend
enlisting the services of both an accountant and attorney before closing any
transaction. Business acquisition is a very complex matter, specifically the
performing of due diligence which is the phase in the acquisition process you
find yourself.
Secondarily, an asset sale may be an option, however you should explore what
assets are for sale. You will need an appraisal of often times differing
collateral objects, making it difficult for an appraiser not familiar with
business valuation.
I wish you luck in your acquisition, or decision not.
This sounds like a disaster waiting to happen. If the "employees" were
required to keep regular hours and were instructed in how to perform their
duties, then they were not independent contractors. If you purchase the
business, you could be liable not only for back taxes but also for the
failure to maintain workers comp insurance and other issues. You need to have
both a CPA and a lawyer review the documents before you proceed. You can find
a reputable CPA by referral from another business owner or by checking with
your local chamber of commerce or Better Business Bureau.
If you are really interested in this business, perhaps a better option is to
purchase only the assets of the business and start your own business and do
it right from the start.
JGabriel | Community Moderator | 3/7/2013 - 11:13 am
CSDIII | Window Shopper | 3/6/2013 - 3:52 pm
The previous commentator provides sound advice certainly. I would recommend
enlisting the services of both an accountant and attorney before closing any
transaction. Business acquisition is a very complex matter, specifically the
performing of due diligence which is the phase in the acquisition process you
find yourself.
Secondarily, an asset sale may be an option, however you should explore what
assets are for sale. You will need an appraisal of often times differing
collateral objects, making it difficult for an appraiser not familiar with
business valuation.
I wish you luck in your acquisition, or decision not.
Kindest Regards,
BizResearcher | Window Shopper | 3/5/2013 - 12:12 pm
required to keep regular hours and were instructed in how to perform their
duties, then they were not independent contractors. If you purchase the
business, you could be liable not only for back taxes but also for the
failure to maintain workers comp insurance and other issues. You need to have
both a CPA and a lawyer review the documents before you proceed. You can find
a reputable CPA by referral from another business owner or by checking with
your local chamber of commerce or Better Business Bureau.
If you are really interested in this business, perhaps a better option is to
purchase only the assets of the business and start your own business and do
it right from the start.
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