Buying a Florida business: What is goodwill? Truforte Business Group
Goodwill refers to all of the tangible and intangible elements associated with the sale of a business. These elements are part of the constitution of the company’s assets and are allocated to the operation of a commercial or industrial activity. Tangible elements represent durable goods that are visible and physical such as equipment, tools, furniture, vehicles, stock (goods, raw materials, finished products, etc.), while intangible elements are not physical but are valuable for the reputation of the company. Examples here include:
- Customer base: These are the people who loyally and repeatedly buy goods from the business because of their satisfaction with its products and quality;
- The brand: This is used to identify the products and services offered by the business. Within a company it is possible to have several brands.
- The business name: This is the unique name assigned to a company or business. A natural person can use his family name or his first name for example, while a legal person can use his company name;
- The logo: Thisrefers to a symbol made of an image, illustration or text (or a combination of all three) to identify and represent a business.;
- The right to the lease: This represents the amount that the business buyer must pay in their capacity as tenant in order to benefit from the rights guaranteed by commercial leases, such as the right to renewal and the eviction indemnity.
- Employment contracts: These contracts are automatically taken over by the buyer of the Florida business. These may be open-ended, fixed-term, part-time or full-time contracts;
- Insurance contracts: These contracts are sent to the buyer when they buy a Florida business. However, these do not include personal insurance contracts or those attached to credit.
- Intellectual property rights: As a means of protecting innovation, patents arise from the invention of a new product or process, if the opportunity arises. It is therefore an intellectual property title which grants its holder the monopoly over their invention.;
- Administrative licenses and authorizations: This is the authorization granted by an authority (State, local authority, etc.) for the exercise of an activity which is not permitted without a special license.
Assets excluded from goodwill
Typically, goodwill excludes buildings, receivables and debts as well as most contracts.To learn more about goodwill and other important aspects when buying a business in Florida, get in touch with the expert business brokers at Truforte Business Group now.