If you really want to sell business, you need to clarify the following aspects inadmissible to any “normal buyer”:
- non-transparent business,
- business generating unaccounted and illegal income,
- business burdened by liabilities whittling possibility of getting income,
- business with unregistered legal rights on fixed assets.
Our big experience of work with business buyers (in major foreign buyers), observes clear desire of buyer to understand company state of affairs, its legal aspect, and whether there're any claims from the side of state controllers and creditors.
As a rule if business is being sold without previous preparations, the buyer performs detailed legal audit of documents and rights; taxation audit and often business cost estimation (e.g. how much does it cost to create the same one from scratch).
Competent buyer will also consider in the purchase contract sellers liability to pay off any of the unforeseen and unconditioned cased (penalties by taxation authorities, ownership claims from the third parties, etc.).
Bad cases from practice
Purchase of dealer’s retail company
After we performed Due diligence (pre-selling check) of dealer’s retail company we revealed that one of the constitutors secretly registered the company being sold as a guarantee of his private credit to the amount of 1 mln. USD by 22 annual % to the 10-year term, foreign customer refused from the deal at once.
Purchase of 50% of shares in huge export-and-import business.
After we conducted Due diligence (pre-selling check that included legal audit, taxation audit, business estimation and financial analysis) of huge export-and-import company, risks of 3 mln. Euro were revealed while company cost made minus 22 mln. UAH. It was connected with ineffective management, big credits and fraud of company-seller officials. As a result foreign buyer offered his 50% stock to the sellers and left the business.
Purchase of woodworking complex.
After we conducted company Due diligence (pre-selling check), it came evident that the sellers «deceived» buyers regarding the owner's rights for the factory land. The land was rented with expired terms of rent and not owned. At the same time the seller's relations with local authorities were spoiled (seller promised school renovation but failed to), and the rent was not extended. The buyer refused to purchase the object.
GOOD cases from practice
Selling of printing complex
Before selling business seller created new legal entity without any debts and liabilities. He reissued all of the permissions, licenses, transferred all equipment, personnel connected with the business; concluded new agreements with customers, performed audit, prepared investment memorandum, drew up company trademarks. Two foreign buyers were interested in business within one month. Both of them performed Due diligence (pre-selling check – taxation and legal audit), and as a result company was sold to the buyer who offered maximum price. The payment was made within 14 days after Due diligence .
Selling of huge logistic complex
Seller prepared company for selling during some time – he performed taxation audit, company reporting was transformed to the reporting according to the international accounting standards. Investment memorandum was prepared. Company was sold to the western European investors within 6 months by mostly expected price.
Selling of internet projects
During pre-selling preparation procedures of projects' transfer to integrated hosting were done, legal questions with domains and trademarks were settled, legal and taxation questions were regulated. After the projects had been offered to potential investors they were realized within two months.
Pursuant to the above mentioned we offer those who really wand to sell business our pre-selling services and services on property rights' transfer.
Pre-selling services:
- Legal audit,
- Taxation audit,
- Drawing up investment memorandum.
- Services on property rights' transfer:
- Our lawyers’ and auditors' participation in negotiations,
- Drawing up business selling contracts,
- Consulting.
Business selling – is activity demanding special preparation and observing of special working technology. It should be obviously performed by professionals.
Services provided by our company correspond completely to the business selling process requirements and include:
Business check and pre-selling preparation
Buyer expects to get full and reliable information about company being sold necessary to make decision of its purchase:
Firstly buyer needs to get imagination of business and he obtains it from investment memorandum prepared by us.
Besides, buyer wants to get business price substantiation, and he obtains it from estimation conclusion prepared by us.
Buyer wants to be sure in business legal purity and he will get this assurance due to our business legal expertise, supporting it with our market working experience and acquired reputation. It's very important because buyer doesn't trust as much the information obtained from business seller; he needs guarantors of information reliability and we're such guarantor.
Services of legal expertise, business estimation, selling documents' preparation including investment memorandum stated enter business pre-selling service package. These services are provided before selling process is started because all of the documents should be drawn-up before meeting potential buyers. Lack of documents may cause ineffective contact with seller or even harm selling process.
Search of the buyer
Search of the buyer is one of the key services provided by our company. In the stage of client's coming to our company we perform preliminary search of buyers from our database including several thousand contacts of people ever interested in purchase of business.
After forming and discussing selling strategy with the seller our company engages buyer by methods agreed with the seller. It's especially significant when the seller doesn't want business selling to be performed in public space.
Work is performed with each buyer separately: agreements on confidentiality are signed, negotiations are carried out, documents are passed, decisions are recorded. Only those buyers who are interested in specific business are invited to meet business seller.
Deal's support
Protection of the seller's interests during the process of business rights' transfer considering buyer's sound interests – the essential task of deal's support services. Hundreds of deals conducted allowed us to acquire essential experience in such cases by our understanding of specific nuances.
Stated services make full service complex necessary for business selling.
Business estimation services and legal expertise may be provided separately from the general complex of services.
