Q: . How can I create a legal binding promissory note?
My friend sold her business to me but it’s still in her name. I can’t change my name because of other reason but Tax responsibility 100% is mine, but I want to have a legal binding document that can create a bond of trust between us. I want to write a kind of promissory note show that if IRS related problems happened to my business, I will take full responsibility not to my friends. I want her to trust me . Is there any kind of legal promissory note can we created ? Thank you .
The issues presented are as follows:
1. protecting your friend from the IRS in the event of a triggering event for liability,
2. give your friend confidence that she is properly protected from liability AND
3. guarantee that its your business and that if its successful, she cannot take it from you.
You need to sit down with an estate planning lawyer and an accountant to draft an agreement that will accomplish the ends sought. Not terribly difficult to do but it needs to be done correctly. Maybe as part of that process, the lawyer and the accountant can also have your friend assign over her interest in the operation to you so that a filing can occur with the taxing authorities to reflect the change in ownership.
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