When you transfer your business to your wife’s name, it includes conveying ownership documents and corporate shares, tax identification numbers and business licenses, especially if you incorporated the business. Transferring a business to another family member is simpler than doing so when you sell the business to an outsider, as no actual purchase of the business happens, so no business sales taxes are involved.
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Review the requirements for transferring businesses in your state, city or county. You may need to hire a paralegal or an attorney to help you through the process and the paperwork. While the process can be done by yourself, it is good to have a professional opinion when transferring a business, even if it is to a spouse.
Examine your business contracts to find a buy/sell agreement, if you have made such a contract. If such a contract is in place, you must honor it, particularly if the contract outlines anything regarding stocks and requirements for transferring ownership of the business. In case something goes wrong and you end up in court, you can argue that you followed your buy/sell contract agreement.
Contact the secretary of state for the necessary forms to change the ownership name, if you have registered your business with the state. You should be concerned about this step if your business is incorporated or is a limited liability corporation or you have stocks or shares that need to be transferred to your wife’s name. Some states have limitations as to how many stocks can be transferred within a given period.
Change the name on all documents to transfer the ownership of the business. This could include filling out new IRS and state forms associated with the Tax Identification Number for
your business. Your wife needs to be a vital part of this process, as her signature is needed in various places. To be safe, create documents to prove she has agreed to take ownership of the business, and have all parties sign the document in agreement in front of a notary. A notary validates your identities and signatures.
Transfer the ownership of stocks to your wife, if applicable. This includes stocks in document form and physical form. Transferring stocks between spouses does not trigger taxes because it is considered an internal family-business transfer.
Create an overall general transfer contract between you and your wife that includes the details of what is included in the transfer. For example, outline whether the transfer includes any assets such as a rented or owned office space, furniture and equipment or it merely involves paperwork. This avoids any confusion or conflicts later.
Contact all business membership organizations to change ownership information that list you as the sole proprietor of the business. This could include your local Chamber of Commerce or any other such business membership organizations where you pay annual dues or fees.
Visit your local city, county or town hall for any forms needed to make ownership changes. If local laws require you to have a business license, you will need to update the name, address and contact information accordingly.
Update fictitious business name licenses as required by your local government. This usually requires filling out new forms and reporting the name change in a local paper that reports these changes legally.
Change the name on all bank accounts associated with the business. This generally requires you and your spouse to physically visit the bank where the accounts are held to make the needed changes.
Category: Personal Finance