Buying a Square Business and Transferring Tax Data

[kaylinsbakeshop]

I am a square user and am purchasing a business from another Square user. I would like to initially maintain the same menu, all of the employees, pricing, website domain, etc.

It makes sense then to "transfer" the ownership of the seller's square account to us and then modify the ownership information (EIN, phone, email), and be ready for business. We will also be changing the business from the seller's LLC to our LLC. However, we will be using a DBA to her current business name. For our customers, it should look like nothing has changed at all, just the ownership of the business.

However, our seller is nervous about transferring the square account due to the tax documentation stored in square. Her lawyer is advising not to transfer the account but that us (the buyers) should start a new square from scratch. Rebuilding everything would be painstakingly long for us to do. Is there a legitimate concern regarding the sales tax forms and tax related information?

[TheRealChipA · Accepted solution]

Hi @kaylinsbakeshop.  After reading your post a few times, I decided that you are not asking about something specifically Square-related, but rather you are asking a legal question.  As such, we would not be able to help you here.  I can say this, however.

If the seller were to transfer their Square account to you then, yes, you would have access to everything that has happened on that account.  Period.  That includes old tax forms that have tax IDs and such things which are considered sensitive information.  If their attorney has concerns about this, these will have to be addressed between the sellers’ attorney and your attorney.  I can’t tell you (and I won’t offer any opinion at all) if the concerns raised are legitimate — that is up to your attorneys together to decide and to hash out. 

[kaylinsbakeshop]

I am asking a Square question. I need to know that when I get transferred an existing square account that access to all of the tax information stored in square will be easy for the seller to access so that the seller can file the taxes correctly for part of the year (January 1-sale date) as well as us, the buyer, filing correctly (sale date-December 31). When a transfer takes place, is there a clear cut to separate tax obligations for each party?

[Candlestore]

@kaylinsbakeshop ;

Here are the issues from your Square About your Bussiness in Square Dashboard on a computer

• Create new
  Transfer business

  This transfers the business to a new person within your organization. To process payments, Square needs to verify their identity. Don’t worry, you’ll still be able to process payments during the transfer process.

  NOTE: This feature is not supported when selling a business.

  Transfer business

  As you see the Transfer of a Business is NOT supported when Selling a business.

  The Business you are buying has everything in Square associated with THEIR EIN and Bank accounts.

  What you should do is Setup your own Bank Account as a DBA.  When that is all setup, Setup a Square account for the DBA.  Then you and the Current owner get on the Phone with Support and see what all can be sent from Sellers account to your New Square Account.  Items is easy, you can export sellers catalog and Load it into yours.  Customers Samething.  The things I am not sure of is the Website, Domain and how to link the Sellers Square Website to your newly Created one.  Now before doing anything I would call Square Support (their number is below) and ask them what would be the best route to do this.  This forum is mostly made up of other sellers and users of Square with a few moderators.  Since we are just other business owners we do not know all the behind the scenes details that would be involved.  The issue with sellers Tax revenue and your Tax Revenue, is why I think Square does not allow transferring Square accounts from one user to another and only allows WITHIN the taxing or business organization. 

  Buying the business and transferring the website from owner A to Owner B might have to have Square/Weebly do behind the scenes.  Again this is why you would need to talk to Square and have your lawers figure something out. 

  The other thing is I do not even know if Square allows modifing an EIN?  

  The sellers Hardware does not retain anything as you need to login to their account, which after the sale You should not be able to login to their Account but Log into yours with your credentials and Device codes if you set them up.  Their Hardware is only using their ID and Password or device codes to access their Cloud based Database.  

  Now to use the same prices, that comes from the Square Catalog which can easily be downloaded from seller and uploaded to a differnt Sqaure account.  The employees I am not sure if you can download their information to import to a new account, you may need to sit with previous owner on this as I have no employees and can not see if I can import export employees.  Which is also the same on how Squares Website would transfer over since it is tied to the current square account and EIN.  This gets me right back to you calling support to see how to handle all this.