Before transferring a percentage of your business to another individual, review the deal from a business perspective. 

Does it brings more sales presentations or increases your business transactions? 

Do you need assistance in splitting operational expenses at the costs of revenue share and usage rights?

If you look forward to legal business collaboration, you can find the steps to follow here.

 

What does partial ownership mean for you?

Partial ownership means the number of shareholders in the asset increase with income sharing, reduced rates, and priority access. 

Hence, it is best to understand your options and negotiate business terms with the other party while drafting the contract. 

You should engage a corporate lawyer to ensure you do not give up more than required or make a mistake that may affect you in the future.

 

Your checklist for partial ownership transfer

The entire transfer process takes a while and needs to be well-planned. Therefore, it is best to look at the inception of a new business.

There are multiple legal formalities, and a corporate and tax lawyer can guide you. 

The steps include paperwork, drafting legal contracts, and transferring usage rights, so you need legal representation to settle negotiations and handle the legal end. But, simultaneously, you can continue with business as usual.

 

Here are the requirements to fulfill a partial ownership transfer –

• Licenses and permits

As the new partner gets a share in the usage rights of the business, they will need access to trademarks, patents, and copyrights to use the assets legally. 

It means you will have to transfer UCC-1 documents showing liens regarding the business property.

• Registration for new documents

New owners need an IRS-issued Employee ID Number (EIN) and another from the state. 

It confirms their registration as part-owners of the business.

• Name and banking alterations

You need to add another bank account and signing privileges to your partner. They will also receive the right to use advertising and marketing material. 

The leases need to include the new owner’s name, and the federal, state, and local need to know the details to make amends to sales tax and license agreements.

• Ownership transfer of assets and liabilities

Before finalizing the transfer agreement, it is necessary to evaluate the assets for redistribution. 

The transfer of liabilities, however, depends on the sales agreement.