Want To Know More About A Business Transfer?
March 30, 2019
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When you are an entrepreneur, you may not be aware of it. But when you retire, you will have to transfer your company to someone else. How does a business transfer work? What should you take into account? What are pitfalls, and how do you avoid them? What should you do to make the business transfer as successful as possible? All this is explained in this article.
Atlantis Financiers is an experienced financier for SMEs. We look at the form in which a loan suits your company best, but we dare to take more risks than the average financier. As a result, there are often more options than you may have in mind. In addition to financing, we are also specialized in debtor management .
If you are an entrepreneur, with a minimum annual turnover of € 250,000, you can submit a financing application using the form on the right. You will usually be contacted within 48 hours about the possibilities.
Transfer company to another
Most problems with a business transfer arise because they are started too late. When you are working hard to make your business a success, you probably don’t (often) think about a future business transfer. Yet this is certainly something that you should be concerned with. Consider, for example, to whom you want to transfer your company. If you wait too long to make plans and arrange the business transfer, this can have major financial consequences.
If you want to retire and have not yet arranged the business transfer, and potential buyers notice this, the price that you can ask for your business is getting lower. This naturally has consequences for your pension. In addition, it is important to look at the future of your company. Of course you want to get the highest possible price for your company, but also want to transfer a healthy company. That way it can be useful to invest in your business. Investments generally earn themselves back, so you don’t feel this in your wallet when you have to repay a credit.
Please note that a tax must be paid on a business transfer. If you do not know how this works, it is advisable to ask someone who knows about it. This way you will not be confronted with surprises and you will know for sure that everything is going as it should.
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Take over a company
It is of course also possible that you have plans to take over an existing company from someone else. There are a number of things that you need to take into account when taking over a business. You may have to sign a confidentiality agreement (also known as a Non Disclosure Agreement (NDA)). This statement explains what must be kept secret and who may have access to the information. It also states what happens if you fail to comply with the confidentiality statement and for how long the statement applies.
Later in the process you must sign a letter of intent. The agreements made are recorded in this. You do not have to go to a notary for a declaration of intent. There is no fixed format for a declaration of intent. This can be a simple A4 sheet with a number of agreements, or a complete book with an extensive report on the sales situation, and possibly with a provisional purchase contract.
In addition to signing both statements, a valuation for the company must also take place. Note that the seller may not charge VAT on the sales price of the company. Request a sales memorandum for the value of the company. A sales memorandum includes the asking price and how it is structured. It also contains extensive company information. The value of the company is determined by looking at tangible assets. Is there a business premises? Are there company cars? What about the inventory? This all counts in the valuation of the company.
Finally, you have a duty to investigate. This means that you must find out whether the information you receive from the seller is correct. Due diligence is the most common method for this. Hereby you are investigated whether the fiscal, commercial, financial and legal information is correct. If you cannot solve it yourself, a consultant or accountant can help you.
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Take over staff
When you become the owner of a company through a business transfer, you are obliged to take over the staff. In addition, you must not change the rights and obligations that the staff already had before you took over the company. You are required to report staff transfer to the Tax Authorities. If this is the first time that you have your own staff, you are also required to report this to the Tax Authorities.
Keep in mind that it takes time to have staff. For example, you must keep track of personnel administration. You must also withhold the wage tax and national insurance contributions from your staff before paying the wage. It can be useful to hire someone for personnel administration, especially if you do not know this yourself. That way you know that everything is arranged properly.
If you are an entrepreneur with a minimum annual turnover of € 250,000 and with a financing requirement, you have come to the right place at Atlantis Financiers. We are an experienced financier for SMEs. We look at the form in which a loan suits your company best, but we dare to take more risks than the average financier. As a result, there are often more options than you may have in mind. In addition to financing, we are also specialized in debtor management.
If you want a financing, you can submit a financing application via the button below. When we have received this correctly and completely, you will usually be contacted within 48 hours about the possibilities.
We only provide business loans. Unfortunately, if you do not meet the sales requirement, we cannot help you further.