Legal Question in Business Law in Ohio

Generally, you would want to purchase the business in the name of the new legal entity, this will simplyfy tax issues, title issues, etc. I would suggest you sit down with an accountant and an attorney. Be very careful if buying a business that has employees or independent contractors. You could easily unknowingly buy their liabilities to the State or Federal government. This has become very common as of late due to very aggressive investigation by the State. For example, let's say it is a trucking company, and claims the drivers are independent contractors. You buy the company, and the Ohio Bureau of Workers Compensation comes to you in two or three years to inform you that you owe $30,000+ in unpaid BWC benefits, with interest and penalties, because the drivers are deemed by them to be employees. Even if this occurred before you bought the business, the law now says you also purchased that debt.

As a Franchise Attorney I agree with the other attorney answer. You should also discuss structuring the deal as a contract of sale where you just purchase certain (but not all) assets to avoid potential liability issues down the road. Consult with a good business or franchise attorney in your area along with a CPA for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation