ADVANTAGES OF SELLING AN OPERATING BUSINESS (WITH ACTIVE EIN)

1. Asset Appreciation

A business that already has an active EIN, tax history, bank account, and potentially established credit is worth more than a newly formed entity. Buyers are willing to pay a premium for a “ready-to-operate” company.

2. Faster Market Entry

Businesses that are already registered with an EIN and, in some cases, industry licenses, allow buyers to start operating immediately. This can save months of delays and bureaucracy.

3. Easier Access to Credit

Older businesses — even with minimal revenue — have a better chance of obtaining business credit or financing. An EIN that’s been active for 2+ years carries more credibility with banks and lenders.

4. Bypasses the Formation Process

Creating a business from scratch (LLC, Corporation, etc.) takes time, involves state and federal fees, and may include legal risks. Buying an established company bypasses this entire setup.

5. Commercial and Tax History

If the company has filed taxes and maintained a clean history, that’s a strong advantage. Some public and private contracts require a minimum time in operation.

LEGAL CAUTIONS

• Due Diligence is critical: Buyers should investigate any tax, legal, or employment liabilities.

• IRS Updates Required: When selling a company with its EIN, the new owner must update the Responsible Party with the IRS

PRACTICAL EXAMPLE

Imagine a Florida LLC with 3 years of clean operation, an active EIN, and a business bank account. An entrepreneur wanting to enter the U.S. market could save 3 to 6 months of setup time and begin operating immediately, including applying for credit lines.