Takeover: an alternative to starting your own business

Generally speaking, when you think of starting a self-employed activity, it is a question of "creation" in the strictest sense of the term.  Yet there is another option which is often not considered: that of the takeover.

Indeed, beyond a possible economy of creation formalities (and associated costs), it can be tempting to take over an existing business, which is already organised, with a customer base, infrastructure … In short, a "well-rounded business".

But while this solution offers undeniable benefits, it also presents numerous risks.  It is a good idea to proceed with caution if you want to avoid any issues.

As an example, did you know that when you take over a business, you become liable for the payment of any tax debts left behind by the previous owner?

Of course, there are solutions to limit the risks, but this example illustrates perfectly that in terms of takeover, the saying that "we do not buy a pig in a poke" makes sense.

A takeover should not be considered without a thorough analysis of the opportunity.

But what are the main points to be considered in a takeover?

Searching a company to takeover

Have you decided to take over a business? Who can you contact to find one? Different possibilities are available to you...

Legal aspects

Lining up the interests of both parties in terms of the legal form of the takeover (purchase of shares or business capital) is not always easy.  More info...

Fiscal aspects

The fiscal consequences vary significantly between transferring shares and transferring business capital.  More info...

Financial aspects

Initially, you would be well advised to identify the company's strengths and weaknesses. In financial terms, obviously.... and for all its other functions.

Whether it is for the takeover of business capital or the purchase of shares, you must determine the company's value. To do this, we recommend using the services of a specialist.  It is also a good idea to find out a little about the most common evaluation methods

Regardless of the method or the combination of methods used, you will then have a good basis to discuss prices with the seller.  And, by the way… don't forget payment conditions. 

It will then finally be time to look for financing.

Surround yourself with the right people

Buying a company requires a broad and specialised vision. Seek support from the right people.  The natural instinct is often to contact your accountant.  This is a good idea to begin with, but it may sometimes be necessary to call upon other specialist experts.  A good accountant will recognise their limits and confer certain aspects to other experts: lawyers for many legal aspects, property experts for assessing the property assets.  To facilitate recourse to these experts, which can sometimes be expensive, remember that there is the consultancy grant (or pre-activity grant).

And to find a purely indicative and non-exhaustive list of consultants specialising in takeovers, see the list of experts on the web portals Sowaccess (FR) and Overnamemarkt (NL). Also consider using the services of Hub transmission of BECI (FR).

Updated 14/09/2018

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