The sale of a C corporation's assets generally results in double taxation on the sale proceeds, first, at the corporate level, and then, upon distribution of proceeds to its shareholders, at the personal level. However, individual business owners of C corporations who can establish that their personal goodwill is integral to the business and is not an asset of the corporation have an opportunity to improve their tax position upon the sale of the corporation. Such owners may (i) avoid the double taxation on a portion of the sale proceeds by allocating a portion of the sales price to personal goodwill as an asset owned by the business owner, and not the corporation; and (ii) recognize long term capital gain (LTCG) on the portion of the sales price allocated to personal goodwill, instead of ordinary income which the business owner would recognize for payments related to other intangible assets (i.e. covenants not to compete).
Recently, Wal-Mart has become one of the largest and fastest growing companies in the U.S. with locations all over the country. The corporation now has its eye on opening its latest location in a town in Michigan. The plans for the new location have been submitted and were set to be examined by a local business planning commission in the middle of April.
A group of Michigan entrepreneurs, capitalists and investment bankers have teamed up to launch Relayfund Inc., a new crowdfunding website aimed at revolutionizing the ways in which startup operators source funding for their business ventures. Adequate funding is always at the forefront of concerns among anyone trying to start a new business . Crowdfunding is simply the act of raising money online from a variety of investors. It involves bringing the talent of inventors and innovators together with the funding from small-scale investors.
An important part of launching a business in Michigan, or elsewhere, is creating an effective business plan and taking the steps to see it through. An essential part of business planning is locating new injections of cash so the business has the funds to expand.