Legal Question in Business Law in New Jersey

Re: selling Goodwill with a business sale

Yes, why would you think it is not legal? Goodwill is typically the most important item in selling a business because it reflects the difference in value between the business assets and selling price.

I hope this helps!

Ron Cappuccio

http://www.BusinessEsq.com

Re: selling Goodwill with a business sale

Yes. Goodwill is an important component of most business sales. In theory, it is the difference between the fair market value of the business and the fair market value of all of its assets less liabilities. That is, it is the "going concern" component of the business' value.

In practice however, the value attributable to goodwill allows of some discetion and will often be an issue between buyer and seller. For example, a business might have a portfolio of assets that includes inventory, equipment, unexpired leases, patents and other IP, and goodwill. Once a sales price is agreed, it may become important for the parties to also agree on the value of goodwill and other intangibles because the IRS may require that both parties treat these assets consistently. So, how the seller has depreciated assets and which are subject to capital gains treatment becomes important to the seller too. Generally, this is more of a tax accounting issue than a legal issue. However, it point to the fact the the buyer needs to have someone look at the valuation of the individual assets of the business at the time of purchase to ensure that the seller has not boxed the buyer it to a less than favorable tax treatment.

See also: http://info.corbettlaw.net/lawguru.htm

Re: selling Goodwill with a business sale

Good Lord. You need some advice and assistance from an attorney.

Your question is pretty basic, and to answer it, YES you can put a price on goodwill in your sale.

There are a LOT of things that you need assistance with in selling a franchise, and a LOT of things that could go wrong or cost you money.

Please get a lawyer, one who knows how to handle sales of businesses. I do.

If you would like me to help you, please give me a call; I am in Hackensack (northern New Jersey). My contact information can be obtained from the links below, just click on the Attorney Profile link. Let my secretary know you found me through LawGuru.

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