Can a husband transfer an ownership of a company to his wife as no cost?

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Can a husband transfer an ownership of a company to his wife as no cost?

I am a foreigner and am going to marry a U.S. citizen. I would like to start sole proprietorship in the state of California right away. However, I need to wait several months for a status of a resident. Can my husband start a business and then, when I am a resident, transfer its ownership to me, his wife, at no cost?

Asked on July 18, 2012 under Employment Labor Law, California

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The business in California as a sole proprietorship is your husband's business but the tax and debt impacts are marital. Bottom line, if this business is not incorporated or created as a limited liability company, the transfer issues are not really as important as the issues of liability protection. You would probably at most need to update the records of the sole proprietorship with the secretary of state if it allows registration of such a sole proprietorship but you in terms of business or transfer tax, you need to speak with the California department of revenue.


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