MK Audit provides qualified legal support for business purchase
Buying a business without a thorough inspection leads to losses and disappointment of the new owner.
According to international studies, almost 70% of those who decided to buy the business based on their emotions or gut feeling, will soon just disappointed in his purchase. Such buyers often declare that in any case would not buy again one of the business so soon, without spending thus time for him and money for a thorough inspection.
Buy a ready business or its sale, are some of the most complicated business transactions. When conducting transactions on purchase and sale of businesses need to consider economic, accounting, legal or tax aspects, and pay special attention to social and psychological aspects. Even the most insignificant at first glance, the omission can not only seriously undermine the business, but even to destroy the operations of the acquired business and the business of the company is the acquirer. The only solution in such situation is to buy the business after a thorough audit.
Examples from our practice:
After our company check retail companies, which our foreign clients bought, was discovered the fact that one of the founders of the secret way designed selling the company as a guarantor on your personal loan of 1 million dollars for ten years at 22% per annum. In the end, a foreign buyer immediately cancelled the transaction and lost the money.
Buying 50% share in major export-import business. After the test was conducted on this import-export company, including business valuation, tax auditing, financial analysis, risks were found in the amount of 3 million euros, and the cost of the company amounted to minus 22 mln. Primarily, this is due to inefficient maintenance management, large loans, and with the fraudulent actions of officials of the company being sold. Upon review of the foreign buyer offered the sellers just to buy his share at 50% and then totally went out of business.
Buying woodworking complex. After we conducted Due Diligence (pre-test) of the complex, it appears that sellers are just misled its customers about ownership of land, which was located under the factory. Upon examination, it was revealed that actually sold the land leased, the period which has already expired and is not in the property. In addition, the seller had damaged relations with the local authorities, because it was refusing to renew the lease. In the end, the buyer decided to walk away from the deal.
Buying a company selling imported farm machinery. In the framework of the pre-test was conducted sudden inventory of fixed assets of the company. The results showed that supposedly balances the two expensive object have long been sold, and some cars are already almost sold decorated General power of attorney. The buyer refused the transaction.
Thanks to the analysis of the success and growth of the largest international companies can get a clear conclusion that their success, growth and capitalization was the result of a successful purchase of ready business.
In all cases, the purchase of a business tax audit and other checks performed by the auditors of the companies customers.
For the purchase of the business brought in the end, the expected results, you must perform the following steps:
- check the seller’s reputation,
- conducting tax and legal due diligence,
- conduct actual inventory of company assets,
- the definition of all obligations and the availability of potential claims, lawsuits against the company to the seller, courts following the purchase,
- the drafting of a contract of sale,
- thinking through the process of buying ready business in all stages of the procedure,
- evaluation of business value and establish the process of departing owners of the company from management.
Also taken into account and the results of other checks for the transaction, which in the future may affect the maintenance and development of the purchased businesses.
The costs that accompany each pre-inspection company are far below those losses that may be incurred by the buyers after the purchase of an untested business. Having the test results and report on the conduct of tax audit, you can reduce almost 50% the value of the company in the bargaining process, relying on all the paragraphs in the report.
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