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 help the parties value the business and reach 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 problems whatsoever.
For sole proprietorships, the buyer purchases the company's assets and takes over operations. Partnerships and limited liability companies do not transfer as easily. If a partner or limited liability company owner sells his or her interest, the buyer can not participate in the business without the other owners' consent. Essentially, the buyer succeeds to the seller's profits and losses in the business unless the other parties agree to allow him or her into their circle. Corporate ownership interests cause the fewest problems because corporate shareholders may sell their entire interests.