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Thread: buying a company

  1. #1
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    buying a company

    Hey guys, im looking at buying a small company that is already established.
    Im just very new to this and i dont know wat is all involved in it. do i need a special licence, are there hidden there any advice some1 can give me?
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  2. #2
    Email problem Missnancyalex's Avatar
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    You should try this link
    afterwards this one I hope you will find some solution.

  3. #3
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    There are quite a few things to look out for, but many can be foreseen by just taking some time to think about all the things that might go wrong.

    One not so obvious thing to consider is that it is much better to buy the "business" and not the company. That is of course assuming you're not already buying tghe business from a sole proprietor. By the "business" I mean, you buy its assets, its customer list, perhaps its staff, its brand, its equipment and and other information you need on how to trade and run the business. You should not buy the company itself, which is the PTY or CC that owns the business.

    Pros: There is no telling what unknown debts and liabilities the company might have that either you have not been told about or that the current owner doesn't know about. If these debts come out of hiding after you have bought the company, then you are liable for these debts and that coud ruin your business.

    Cons: You will need to regsiter your own company and go through the hassles of registering for VAT, income tax, as an employer, opening a bank account and re applying for credit from suppliers.

    Yes the cons are a major pain in the neck, but if you have an unscrupulous or desperate seller, the problems from the "pro" might be far greater.

    Create your own company and start with a clean slate.

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  5. #4
    Diamond Member Justloadit's Avatar
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    Just remember that buying as an ongoing concern, which is buying the business, and not the company, has a hidden problem, which can not be made to go away, and that is the staff, which includes their pension and long term service benefits, leave and leave pay. Make sure you understand this part as well, as this can have far reaching consequences on cash further down the line.

    Previously, the company could retrench the employees, do all the payouts, and the new company would then rehire the employees and start from scratch as new employees.
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    BusFact (14-Dec-11)

  7. #5
    Diamond Member Blurock's Avatar
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    Not enough information to be able to assist. Why would you need a special licence? Is it a food outlet? Do you require special training? What type of business or which industry is the business in?
    Excellence is not a skill; its an attitude...

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