How do I transfer ownership of Sole Proprietorship? NEED QUICK HELP

Discussion in 'Business Operations' started by ChristianJ318, Oct 20, 2010.

  1. ChristianJ318

    ChristianJ318 LawnSite Member
    Posts: 102

    I searched the internet and the forums here and didnt find any help that applied to my situation. I have a very small Sole proprietorship business with no assets that I run from home. I would like to transfer ownership to my wife ASAP!. The only paperwork that was originally required was a occupational license and filing the trade name with Clerk's office. I did acquire an EIN number but I do not have any employees.
    We are trying to buy a new truck and unfortunately, I have some old credit issues so the new purchase will have to be under my wife's credit alone. She is a school counselor and doesnt show a lot of income so, the debt to income ratio is raising the rate. If she is able to prove additional income, the credit union will drop the APR a couple of points which makes a $30+ difference each month and a couple thousand over the term of the loan. Ive contacted the Sec. of State, Notaries, and Attorneys trying to get this done and nobody can help. Well an attorney will for a few hundred dollars but that money needs to go towards down payment. I figure there is a form that needs to be filled out and notarized but I dont know what/where the form is.. Can someone please help me with this?? Im in Louisiana if that helps.
     
  2. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    I think your problem is that a sole proprietorship is little more than a job. There is no formal business structure to sell. LLCs and INCs register their business with the state and list their officers, assets etc. You have nothing but a business income deduction on your 1040s. It's just the way it is. Even if you were to form an LLC there still isn't much of value outside of the assets there. In an LLC the company makes the profits and distributes them to the partners. Partners can be added and removed I believe. You still wouldn't have anything to show as income though since it would be a brand new LLC.
     
  3. Az Gardener

    Az Gardener LawnSite Gold Member
    Posts: 3,899

    In most states whats yours is hers so she already owns the company with you. If you filed jointly it should be on your tax return.
     
  4. Richard Martin

    Richard Martin LawnSite Fanatic
    Posts: 14,700

    Their problem is he can't be on the loan. They can't use a shared income if he's a part of that income.
     
  5. ChristianJ318

    ChristianJ318 LawnSite Member
    Posts: 102

    Exactly. I'm really hoping to get this figured out within the next couple of days because this is the only thing holding up the purchase of the new truck. The anticipation is driving me crazy. That new car smell is like crack!
     
  6. Roger

    Roger LawnSite Fanatic
    Posts: 5,920

     
  7. ChristianJ318

    ChristianJ318 LawnSite Member
    Posts: 102

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  8. ChristianJ318

    ChristianJ318 LawnSite Member
    Posts: 102

    Roger, I don't take offense to your comment but we are not too tight on money to make this purchase... The credit union is going on my wifes income and credit alone. They are not considering any income from my two businesses or my third p/t job. I'm not saying that we are wealthy but a car note isn't going to change our way of living. I made mistakes when I was young and single and learned from them. Fortunately we are not one the families you refered to that started the credit crisis.
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  9. ChristianJ318

    ChristianJ318 LawnSite Member
    Posts: 102

    After reading my original post again, I don't see how you would take it that were financially tight. Essentially it's like were at the dealership and they say xxx is what you'll pay over the course of the loan but if you sign this piece of paper transferring 1/3 of your monthly income to your wife you'll save 2-3,000 at 3.9% interest wouldn't you want to find that piece of paper?
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  10. coolluv

    coolluv LawnSite Gold Member
    from Atlanta
    Posts: 3,619



    Those could be the reasons.

    Dave...
     

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