Can closely held businesses be bought and sold?
Individuals and other businesses can acquire closely held businesses as long as the current shareholders are willing to sell. Since many closely held businesses involve family relationships, emotional events including divorce, estrangement, or death may precipitate the business sale. Needless to say, these circumstances may complicate any business transaction. One difficulty in purchasing or selling a closely held business involves valuation. Since shares in closely held businesses are not commonly traded, parties may find it nearly impossible to agree on a fair price for the business. Financial professionals and lawyers can assist the parties in valuing the business and reaching an amicable agreement for its transfer. Another common issue involves the transferability of the business interest, which depends on the underlying business form. Some transfers cause no complications whatsoever. For sole proprietorships, the buyer purchases the company’s assets and takes over operations. Part
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- Can closely held businesses be bought and sold?