Selling a business has major legal and tax consequences.Overlooking details can cost sellers millions. Here are the most common pitfalls.
## Legal Pitfalls
- **Incomplete Agreements:** Ambiguous purchase agreements invite disputes.
- **Unclear Non-Competes:** Weak clauses let sellers compete against their own company post-sale.
- **Licenses & Permits:** Failure to transfer or renew causes delays.
- **Employee Issues:** Unsettled contracts or liabilities scare off buyers.
## Tax Pitfalls
- **Misclassifying Assets:** Allocation between goodwill and equipment affects tax owed.
- **Not Planning for Capital Gains:** Federal and state taxes eat into net proceeds.
- **Overlooking State-Specific Rules:** Each state has unique tax implications.
- **Missing Deductions:** Sellers often fail to optimize pre-sale expenses.
### Example
PAC Consulting advised a seller who faced a $400K tax hit due to misallocated assets. With CPA support, we restructured and cut liability by nearly half.
PAC Consulting works with attorneys and CPAs nationwide to protect sellers from costly mistakes.