Company takeover: an alternative to starting your own business
Being an independent does not necessarily mean you should start your own business: you can take over an existing company. It’s not a simple affair, however. The focus points are summarised in this checklist.
Taking over a business undeniably has some essential benefits. For example, there are far fewer setting-up formalities and the associated costs are also lower. In addition, an existing company already has a customer base and brand awareness that you can build on. But a takeover also involves a number of inherent risks. Use this checklist to avoid buying a pig in a poke.
1. Look for a company that suits you
Since running your own business takes up a lot of energy, you should logically be looking for a company in which you want to invest yourself fully. No idea where to start your search? You will find a handy overview with various sources here.
2. Carefully examine the legal forms (and their tax impact)
In the case of a takeover, both parties must agree to the legal form of the takeover. There will be two possibilities: either a transfer of the shares or a transfer of goodwill, in which you take over the tangible (such as inventory) and intangible assets (the regular clientele for example). Both options have different tax consequences. So, better to play it safe.
3. Compare the pros and cons
Do you have a potential takeover in mind? You should start by listing the pros and cons. Conducting a valuation and a due diligence investigation are some useful tools for that purpose. In the latter case, a specialist contrasts the company’s assets and potential risks: from dubious bookkeeping to extensive stock.
4. Look for funding
Once you have made the decision, you’ll need to seek funding. In addition to providing your own capital, you can approach banks and other investors. You must draw up a comprehensive financial plan to get their support, however. In addition, you may want to apply for subsidies. Various funding options are available.
5. Enlist an expert in time
More often than not, a company takeover is specialist work involving numerous formalities and regulations. So, be sure to consult a bookkeeper or an accountant.
You can also rely on the specific know-how of experts such as a lawyer or real estate expert. If you request their assistance, the Brussels-Capital Region will refund (under certain conditions) up to 50% of the costs associated with that advice – also known as preactivity support. In addition, you can also apply for similar financial support for consultancy.
You will find a (limited) overview of acquisition experts on a number of specialised websites such as:
Many considerations come into play when taking over a company. So, get plenty of information before you take the plunge and seek the assistance of an expert. Any questions? We will be happy to help you.