In the United States, the ownership of a business changes for a variety of reasons.
One can either buy out another partner’s shares or sell a portion of the business to somebody else. Whatever the reason, this article lays out some important aspects to keep in mind, specifically the business change of ownership letter to vendors.
Changing ownership can affect the business operations, especially if, at the beginning, the company was set up by a group of people with specialized skills and know-how.
When changing the business ownership, it is very important to make sure that one can fill the gap left behind by the owner with specialized skills and experience. This is crucial for the business to be able to perform in the future.
Communication is very important when changing the ownership of the business
It is imperative to inform both the staff and the vendors that a business change of ownership has occurred. It is recommended that the employees and management of the company are informed of the changes that directly impact them. For instance, if the business is bought by another company, meaning the registered employer is being changed, the staff should be informed about this. Some of the working conditions might change such as working hours, holidays, remuneration, healthcare, retirement plans etc.
Another important step is the communication with the vendors
When there is a change of business ownership, one should send a business change of ownership letter to vendors to inform them of the change in circumstances. This kind of letter is a formal announcement and it is usually sent to the faithful vendors of the company and the devoted customers and employees explaining that the owners of the company are going to waive the ownership to some individual or company.
The letter lets the vendors know that the business ownership has changed, and therefore the people and the point of contact for the vendors have changed as well. The letter may include few important details about the new owner of the business, the name of the company, their qualification, know-how, experience and basic contact information. Disclosure of details other than these basic ones entirely depends upon the company’s policy and decision-making.
A business change of ownership letter to vendors should include relevant details such as the impact on the existing contracts and the new policies of the company. Moreover, the letter should include details about changes in the rules and regulations of the company. Such letter would show the vendors the history of the buyers and would give them certainty regarding their partnership.
A financial statement and the records of the buyer is helpful to show the vendors that the company is able to have a serious and reliable partnership. Lastly, the business change of ownership letter to vendors should reveal the reason for the business change of ownership. All this information helps maintain a healthy commercial relationship between the vendors and the new company.
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