When you sell your business, addressing any existing liabilities, including those tied to an AMEX business card, is crucial to ensure a smooth transition and protect your personal finances. Here are steps you can take:
Review Account Details: First, review the terms and conditions of your AMEX business card to understand the liability structure. Determine if the card is under a sole proprietorship or linked to your personal credit, which could impact your personal liability.
Consult Your Agreement: Check if the card is personally guaranteed. If so, even after selling the business, you might still be responsible for the debt unless explicitly stated otherwise in the sale agreement.
Communicate with AMEX: Contact American Express to notify them of the sale and inquire about transferring the account. Sometimes, they may require the new business owner to assume responsibility or open a new account under their name.
Legal and Financial Advice: Seek advice from a lawyer or financial advisor. They can help structure the sale to either transfer, settle, or close the existing liability, ensuring it’s correctly handled in the sale agreement.
Secure Written Agreements: If the buyer agrees to assume the liability, ensure this agreement is clearly documented legally, protecting you from future claims.
Close or Transfer Account: If a transfer isn’t possible, and with your advisor’s guidance, consider closing the account to eliminate any future claims or liability using a provision in the sale for the buyer to open a new account in their name.
By taking these steps, you can manage your AMEX business card liabilities responsibly as you transition away from the business, protecting your interests post-sale.