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Leasing a business

My friend owns a business, an LLC. He is the sole proprietor. He is old and wants to retire. He wants to lease the business ( the whole business , not just the property ) to his sons. How does he lease a business ? All I can find is information on commercial leases, which refer to the property only.

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The BAF Group LLC
MD

"Leasing" a business is rarely, if ever done. That is not to say it cannot or never has been done; but what are you "leasing"? The normal value of a small business in particular is in goodwill, which is an intangible. How do you lease an intangible? You can lease the space; you can lease the equipment. But the goodwill is essentially something that needs to be sold, almost by definition. Probably a better way to do it would be to come up with a price for the business, then have the Owner sell the business and finance the transaction for his sons.

Jan 1, 2014

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