There are three ways to sell or acquire a business:
- Full sale by the owner – in this case, all ownership of the business is transferred.
- Sale of corporate rights – in this case, the business is transferred in a simplified mode: a way to change the composition of owners and the structure of their shares or to change the owner of a legal entity.
- Donation – the business is donated.
More than 90% of transactions are made using the first and second methods. In order for the transaction to be carried out without problems, a large team of lawyers, tax assistants, tax consultants, accountants and business assistants is needed.
Is there a difference between the procedures of selling and buying a business?
Buying and selling a business is quite different. Each procedure has to pass a certain stage in its own way. The buyer (investor) has certain algorithms of preparation for the transaction, and at the seller (owner) has other. The goal of the buyer is to reduce the risks and problems of the purchase, while the goal of the seller is to sell the business or his share in it for as much as possible.
Legal support for business acquisition
Organizing a business from the very beginning can be quite troublesome. It is necessary to prepare in advance for various difficulties, financial problems, and the bureaucratic red tape. But all this can be avoided if you buy an established business.
However, there are also some problems. We do not recommend making such a purchase by yourself, as this process is very difficult and responsible. You will need the help of a special lawyer, who can support the organization of the business acquisition transaction, and it is almost impossible to do it without him!
Legal support for business acquisition, what is included?
- Complex audit of the financial activity of the company, as well as risk assessment, including checking whether there are debts and other burdens: liabilities, corporate and labor relations (due diligence), etc.;
- Preparation of recommendations on investment conditions, development of financial and legal algorithm of investments;
- Development of a business plan for growth of the business;
- Legal execution of the transaction and its maintenance (transaction with shares or stocks, agreement to provide the option, corporate agreement, corporate procedures);
- Negotiation;
It is worth noting that S&P Agency is a reliable partner and has been successfully defending clients’ interests in investment projects for many years.
Professional approach and high standards of legal services provide our clients not only profitable and risk-free investments, but also a clear understanding of the prospects for the development of a new business direction.
What does the legal support for business sales include?
- Audit of the accounts of the seller, its assets, and liabilities
The accountant primarily conducts the audit of accounting documents, assets and liabilities, and inventories.
- Analysis of all the stages of purchasing real estate
In practice of S&P Agency lawyers it is reassuring that many real estate transactions can be challenged even three years after the sale. There are many reasons for reinstatement of missed sentences in court. Therefore, the lawyer studies the history of properties (on the internet and registered GPA), analyzes the title documents.
- Expert assessment of major contracts
Legal support of the purchase of a business is only successful when meticulous examination of contracts and other documents is conducted. Thanks to it, it is possible to find serious forfeits and fines stipulated by contractual obligations. Contracts may, however, specify genuinely unrealistic terms for the acquired legal entity. Therefore, testing for potential and real risks is a critical step.
- Reconciliation of ownership stocks and shares
The lawyer requests and checks all documents: constituent, minutes of the General Meeting of Shareholders and the Board of Directors, other management bodies. If corporate papers are misstated, there are risks that shareholders or former shareholders will challenge them.
- Verification of debts and other liabilities
There is a very high probability of the existence of debt to fiscal, utility and service authorities. Therefore, the business acquisition algorithm must include a check of tax debts to the State Penitentiary Service of Ukraine. It is also necessary to check whether the share of business in the pledge to the bank or other commercial organization: the presence of liabilities and risks on them is also worth checking by the lawyer.
How to Close a Deal Without Risk
Thus, many tasks require careful and professional attention. The S&P Agency Company offers legal support for business sale and purchase.
The final stage of the transaction for both parties will be a change of ownership and CEO, which we will conduct in one day. Consult with us today at
+38 (044) 383-00-00 or email us at office@sp.agency. We’re always in touch!
