What happens if my business changes its legal structure or ownership?
Curious about Merchant account
If your business undergoes a change in legal structure or ownership, it may have implications for your merchant account. Here's what typically happens in such scenarios:
1. Change in Legal Structure:
If your business changes its legal structure, such as converting from a sole proprietorship to a partnership or incorporating as a limited liability company (LLC), you will need to inform your merchant account provider.
You may be required to provide legal documents supporting the change, such as the updated business registration or formation documents.
The merchant account provider will review the new legal structure and update your account accordingly. This may involve updating account details, ownership information, and any associated contracts or agreements.
2. Change in Ownership:
If there is a change in business ownership, such as the sale or transfer of the business, you will need to notify your merchant account provider.
The new owner will typically be required to apply for a new merchant account in their name.
The acquiring bank or payment service provider (PSP) will initiate a due diligence process for the new owner to assess their eligibility and suitability for a merchant account.
The new owner will need to submit relevant documentation, such as identification, business registration, financial statements, and any other required information.
Once the new owner's application is approved, they will receive a new merchant account in their name, and the previous merchant account will be closed or transferred accordingly.
It's important to proactively communicate any changes in legal structure or ownership to your merchant account provider to ensure compliance and continuity of your payment processing services. Contact your acquiring bank or PSP as soon as possible to discuss the specific requirements and processes for updating or transferring your merchant account. They will guide you through the necessary steps and provide you with the relevant documentation and support.