Why Now is the Right Time to Sell Your Company

www.allcapcorp.com 

Are you considering selling your business? Don’t let the kick-yourself moment turn to regret.

The current political climate and pressure to balance the federal budget are driving tax increases that will have a dramatic impact on middle-market business owners. Capital gains taxes are expected to increase at the end of 2012 from 15% to 20%, and owners will be keeping less of a company’s sale price beginning as early as 2013. The cost basis for privately held businesses is typically very low, and the resulting tax burden means that a business owner selling their company for $50 million will pay an additional $2.5 million in taxes alone.

Considering that the average time required to complete a transaction is 9 to 12 months, you may want to consider a liquidity event in the short term. Allegiance Capital is already working with several clients who have decided to move forward with a transaction sooner rather than later in order to prevent the government from taking a larger portion of their proceeds.

If you’d like to discuss your options, please feel free to contact me directly.  For more information go to: www.allcapcorp.com. We look forward to speaking with you.

Additionally, Credit Suisse recently published a best practices document for pre-transaction planning that discusses wealth preservation. Many of the strategies can be undertaken well in advance of a liquidity event. We found the information very useful and believe you would as well. Let us know if you’d like us to forward you a copy.