One of our clients came to us with a seemingly simple goal: he wanted to be able to transfer ownership of his business to his children.

When he first approached us with the situation he was planning on transferring ownership of the business through a stock sale.

Gather Crucial Information

Our team spent time figuring out exactly what the company did and how it performed business operations. Through this analysis we identified what the underlying assets really were and discovered that the company was using intellectual property (a software platform) that the business owner had developed over a number of years.

He owned this IP personally.

This was a big find!

After gathering this crucial information our team was able to look at the transaction and modify it so that it became partly a stock sale and partly the purchase of intellectual property. Now instead of just selling stock, the owner would also be selling assets to his children.

Why was this so important?

By identifying this information for our client and restructuring the transaction, we were able to save each family receiving ownership of the business $120,000 dollars in tax savings because the IP could be amortized and deducted against the business income each year.

You can’t do that if all of the purchase price is allocated to stock.

The business owner’s children were receiving ownership of the same exact company, but by restructuring the transaction they would now each have $120,000 extra dollars in the business that would have been lost to taxes.

Analyzing business sales, and helping structure them in a way to save tax dollars, is one of Tembo’s best strengths.