Buying a business? What is with the 401(k) plan?

If you own a business, expanding by buying a competitor goes a long way. Mergers and acquisitions are a huge part of growing a business.

The problem with corporate transactions is dealing with the retirement plan for the company you’re buying. This isn’t an issue if you’re just buying the assets of another business. If you’re buying the stock of another business, you need to protect yourself since a 401(k) plan of the business you’re buying, goes with it. Make sure the merger or stock purchase agreement handles the 401(k) plan and due diligence is needed to make sure the plan that is coming is in good shape.

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