DOCUMENTING TRANSFERS |
| Transfers,
leases, and contract assignments must be documented along with any assumption of
liability. If a prior business transfers into the new corporation, the new corporation
should adopt any existing fringe benefits and qualified plans or the ability to deduct
payments on them may be denied. The plans may need to be amended. The assignment of
liabilities, particularly secured debt, to a new corporation may require approval.
Although vendors will generally not be a problem, bank loans and leases will generally
require approval before assignment. Failure to get these approvals may result in
accelerating the sums due under the contracts. A useful tool is a blanket assignment of
all rights and liabilities to the corporation, subject to any required approvals. |
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