Quote Originally Posted by mmcd View Post
Thanks for all the feedback guys. Could I just stipulate in the sales agreement that the tax liabilities will be paid for with the proceeds of sale?
Under whose action?
There is no guarantee that the seller uses the money for settling the debt, which still leaves the door open on you as the responsible person.

You can opt to pay the taxes, by reducing the value of the sale if the seller is interested.

I would rather purchase the assets of the company, and stock that it has, and the IP. Get the seller to transfer the debtors list to you , and make an agreement, that from the 1st of the following month, you start invoicing and take care of any purchasers from this date forward. All collections and creditors to the end of the month before you start is for the sellers account. In this way you have a clean set of books. Any bad debts or collections are the sellers problems, any outstanding accounts are the sellers problems. You then visit the creditors, and make them aware of the situation, and open new accounts and sureties if required under the new name, trading as old name. Speak to debtors that company name changed and that bank account changed.

Any payment made into your account for previous months, is simply passed onto the seller.

I would get a business broker involved in this deal to ensure that you are covered. There are just too many skeletons hiding in the closet, especially when a company starts struggling to do business.