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

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. 

3 Replies

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

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

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

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.  

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

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! 

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