Sales commission owed when business is sold

[justalayman]

yes, but only in that I will continue some journalism, probably unrelated to the magazine (unless the buyer wants me to contribute articles in the future), but I am retiring.

So you are not selling a business entity but merely an activity the business was involved in


Do you even have separate cost accounting (profit and loss statements ) for the ezine or was it simply an activity the business (the Corp) operated?

 

[LdiJ]

So you are not selling a business entity but merely an activity the business was involved in


Do you even have separate cost accounting (profit and loss statements ) for the ezine or was it simply an activity the business (the Corp) operated?

I think that you are a little overfocused on the fact that he is only selling off the ezine rather than the whole corporation. It is a rather common business practice to sell off only the assets of a corporation rather than also its debts. Its sounds to me like the total business of the corporation was the ezine, or almost all.

 

[justalayman]

I think that you are a little overfocused on the fact that he is only selling off the ezine rather than the whole corporation. It is a rather common business practice to sell off only the assets of a corporation rather than also its debts. Its sounds to me like the total business of the corporation was the ezine, or almost all.

youre very poor at reading. My point is that he didn’t sell the Corp so it retains all contracts entered into by the Corp unless the contracts are assumed by the buyer of the group of assets making up the ezine portion of the Corp.
I’m not arguing anything suggesting a Corp can’t sell off assets. The issue is all he sold was the sssets and goodwill of the ezine. He did not sell a compsny so the op remains liable for the ic’s earnings.

The issue is if he did not sell a business, any contracts in place with the Corp remain with the Corp unless sepcifically included in the sale. If the op did not include the contract he has with the ic, the op remains liable for paying the ic

And your last statement is just rediculous. It doesn’t matter how little of the corp is left, it is still the business entity that operated the ezine as it doesn’t appear the ezine was created to be a separate business (as in the ezine business was properly formed and recorded with the state and such).


I’ll try to make it simpler for you

Justalayman is a corporation. Jal Corp, among other things, produces an ezine. It is one operation within jal Corp. jal Corp also manufactures and sells widgets as another operation within jal Corp.The ezine produces a positive cash flow into jal Corp of $1,000,000,000 per year. Jal produces 10 widgets per year. That operation produces a positive cash flow of $12.95.

So, jal Corp wants to get out of the publishing business so they decide to sell th assets and goodwill involved in the ezine. Let’s say thwt wmounts to a computer with a bunch of software and a contract with several advertisers to pay jal Corp for ad space.

Now since I was too busy to contact prospective advertises for the ezine, I hired a contractor salesman (IC). Jal Corp signs a contract with IC. Now, jal Corp is selling the computer, the software, and the contracts with the advertisers.


since this isn’t a magic trick and there is no slight of hand, where the contract with IC is is obvious. It is still in the hands of jal Corp because it was not part of the assets or goodwill associated with operating the ezine.

Now who do you think is liable for the money owed to IC?

Well, it’s not buyer becsuse the contract was signed with jal Corp and that contract was not transferred to buyer.


Let’s see, just who does thwt leave with IC’s contract in their hands?

Jal Corp which means jal Corp liable for payments due IC.

 

[graphite]

So you are not selling a business entity but merely an activity the business was involved in


Do you even have separate cost accounting (profit and loss statements ) for the ezine or was it simply an activity the business (the Corp) operated?

the whole business is the magazine (both print and online), but I am keeping the corporation in order that I can receive payments and pay bills that will be due after transfer of ownership of the magazine and continue to work in other unrelated fields of journalism without have to dissolve the bank accounts and start a new corporation. That way all monies stay in the bank account, and there is a clean break for all payables and receivables from my last issue to the next, which is the buyer's first issue. It's how I bought the magazine 16 years ago. This will be an assets and good will sale of the magazine and it's connected parts, which are digital in terms of websites and digital files. So, in that respect all accounting is about the magazine up until the date of sale.