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Purchase of small business

Purchase of ready business is the "epoch-making" event defining your life and the beginning of qualitatively new period in enterprise activity. Event this not ordinary also demands thoughtful study of all nuances (financial, psychological, social, etc.). In opposite cases you will manage ??? a cat in a bag ??? or ???lemon??? (its North American colleague) ??¦ And if the remedial party of the transaction is somehow supervised by the broker and-or the lawyer representing your interests for financial consequences including tax, you answer.

First of all, you should represent clearly that you buy/sell. If it is private business or company, as a rule, you get the equipment and property, clients and the trade mark, commodity-material stocks in this or that combination. It is clear, that after that the previous business ceases to exist as enterprise expression of the former owner and you become the new owner listed above. The various property has different terms and norms of write-off and, accordingly, different tax aspect. Therefore, in your interests the nobility particularly ??? that and how many ??? it is (in money terms got.

It is necessary to remember also, that as the BUYER you to list PST (7 %) on the got property (excepting commodity stocks for the subsequent sale) if this tax is not specified by separate line in the contract of sale and purchase or have not been paid to the seller. If it is corporation, you buy actions (a share in business), giving to you the right to operate, supervise and receive a part of profit. Thus, the status of the company as legal person does not vary also it continues to function in former quality. The basic document confirming purchase of business and defining conditions of sale, the contract is. The standard form covers basically the transaction, but in your interests that the conditions protecting your interests have been included in the contract all The item on presence of the mortgage at a rate of 1-3 % from the sum of the transaction which remains at you within several months on a case of occurrence of unexpected debts and creditors, will allow you to continue easy your business, instead of to search the former owner.

Very closely it is necessary to approach to purchase of business with workers. In case of debts of the former owner against workers under the salary, the tax service or the commission under the labour legislation (Labor Standard) will try to solve the problem ??? small blood ??? and due to the first got under a hand. The broker or the lawyer do not pay attention to such aspects as it to not work with this "heritage". Therefore, attraction to the contract of the bookkeeper to which you are going ??? to be given on... ???, Will allow you to avoid troubles. To the contract it is desirable to have financial reports and, whenever possible, not for one period. In case of private business are copies of tax declarations about business by a part. In cases of corporation ??“ financial reports under the accepted form. It is clear, that these documents should correspond to the conclusion of tax management. Such documents at times speak the bookkeeper more, than the seller, and can become weighty arguments during the tenders. But entirely to rely on them would be because of an opportunity of a mistake, the incomplete information or deliberate adjustment. And, therefore, you should conduct own marketing research, study similar business and statistics, to rely on common sense.