What is the name of your state? Michigan
Hello,
My husband and I are considering buying an existing business which is solely owned/run by a childhood friend of my husband. The business is a hotdog vending business which includes equipment, business consulting from current owner, and the city vending permits. The permits could be of particular value because the city issues them based on seniority so we could keep the current permits for the high traffic street corners. The "know-how" however, is not very valuable since the business is not complex or difficult to learn.
Our concern is regarding liability. No taxes have been claimed in this business since its start. As far as the IRS and state is concerned, this "business" does not exist. This is NOT the way my husband and I would run a business. If we were to buy the business and run it legitimately, can the IRS go after us later for the previous owners illegal business practices? How can we take over the business and still protect ourselves from this potential liability? We have considered taking over and giving the business a new name as if it is a a new start-up business but then we loose seniority for the permits. If we were to change the name and break all ties with the current owner, the business really has no worth outside of tangible value and therefore, the owner would not give it up. The city where we live cannot support 2 hotdog vending businesses, therefore starting up our own vending business is not an option.
What would suggest to someone in our position? With the daily revenue, annual fairs, university football games, and private parties, this is a lucrative business.
Thank you for your feedback.
Hello,
My husband and I are considering buying an existing business which is solely owned/run by a childhood friend of my husband. The business is a hotdog vending business which includes equipment, business consulting from current owner, and the city vending permits. The permits could be of particular value because the city issues them based on seniority so we could keep the current permits for the high traffic street corners. The "know-how" however, is not very valuable since the business is not complex or difficult to learn.
Our concern is regarding liability. No taxes have been claimed in this business since its start. As far as the IRS and state is concerned, this "business" does not exist. This is NOT the way my husband and I would run a business. If we were to buy the business and run it legitimately, can the IRS go after us later for the previous owners illegal business practices? How can we take over the business and still protect ourselves from this potential liability? We have considered taking over and giving the business a new name as if it is a a new start-up business but then we loose seniority for the permits. If we were to change the name and break all ties with the current owner, the business really has no worth outside of tangible value and therefore, the owner would not give it up. The city where we live cannot support 2 hotdog vending businesses, therefore starting up our own vending business is not an option.
What would suggest to someone in our position? With the daily revenue, annual fairs, university football games, and private parties, this is a lucrative business.
Thank you for your feedback.