Purchasing LLC - could I be audited for previous owner's doings?

Forum|Forum|3 years ago
April 24, 2023
3 replies
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We are considering purchasing a single member LLC. If the current owners have done fishy things with their business, could we be audited for whatever they did? Assuming that we run everything above board, obviously.

Bsch4477

Employee

An attorney would better answer this question after looking at your buy agreement.

Opus 17

Employee

Most of the time, a situation like this would be handled by you forming your own LLC, and then purchasing the other business as an "asset only" purchase. In other words, you form XYZ, LLC and you then purchase the building, equipment, supplies, customer list, name, and good will of ABC LLC, without actually purchasing ABC LLC itself.

That's just in general. Please hire your own attorney to advise you.

Mike9241

there could be no tax issues but there could be other legal issues you would be responsible for. when buying a business consultation and review of the documents by an attorney is important. buyer beware!