How to Acquire a Ready-Made Company for Business Expansion

Deciding to expand the horizons of commercial business, an entrepreneur is faced with a choice: organize a business-project from scratch or buy a ready-made one. Registration of an LLC (as well as in any other form) requires time and certain knowledge. It is necessary to prepare constituent documents, company Statute, and internal orders. Few people manage to do everything right the first time. Of course, experienced entrepreneurs already understand how to establish and open commercial projects. However, this in any case, is fraught with excessive loss of time and personal efforts.

Our company involves professional experts in the field of establishing and licensing companies in hundreds of commercial areas. We have a huge database of shelf-companies for sale, in particular, ready-made companies with an active HSBC bank account in Hong Kong, crypto companies in Estonia, gambling companies in Malta and much more. We know how to wisely expand your business-project and attract additional valuable investments.

The Concept of Acquiring a Ready-Made Company for Business Expansion

Buying a ready-made business-structure to expand the boundaries of your own commercial project is one of the fastest ways to enter the global market. An entrepreneur will not have to waste time creating a foreign firm and resolving all related issues. Instead, an entrepreneur can immediately begin to engage in commercial activities and develop his/her business-structure.

Acquiring a ready-made company abroad or in the initial jurisdiction means transferring shares from old owners to new ones, as well as concluding a purchase and sale agreement. This option is preferable for those who want to save time and start doing business-project immediately after purchase. Typically, the acquisition of a shelf-company occurs through specialized consulting and law firms. They register companies for their further sale and help new owners prepare all the necessary documents.

Shelf companies do not conduct commercial activities and do not have real assets. However, they are already registered, registered and considered legally valid. They have constituent documents, charter and other necessary papers. Moreover, an entrepreneur can buy either a new firm or one with a certain period of existence.

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Setting Your Expansion Goals

An entrepreneur needs to fully evaluate his/her business-goals. Depending on what result we want to achieve, it is possible to consider one of the following most optimal organizational structures for business expansion.

1. Buy a franchise. Purchasing a franchise makes it easier to organize a business-activities: the franchisee immediately receives a set of recommendations, technology, and sometimes raw materials and goods. However, it acts as an independent legal entity, which means it is also necessary to create a firm, recruit staff, rent premises, etc.
2. Buy a ready-made LLC with a zero balance. You can purchase an already registered organization, registered with financial and other supervisory authorities with all documents, that was not active before. Such enterprises in the form of LLC, JSC are often offered by legal and consulting companies that specifically create them for the purpose of subsequent sale. As a rule, the package includes zero accounting statements for the entire period from the beginning. But the business-structure, as such, will have to be organized independently.
3. Buy an existing firm. Buying a ready-made and already-operating business project saves time. There is no need to deal with purchasing or leasing real estate, looking for personnel, or solving other organizational issues. You can immediately get involved in the business and conduct it according to your own plan.

Buying a foreign firm has a number of advantages for entrepreneurs.

1. Save time. By purchasing a ready-made organization, an entrepreneur immediately begins to conduct business-activities, bypassing the process of registration and paperwork.
2. Resident status. Purchasing a foreign firm gives the entrepreneur access to tax preferences and support programs available in the chosen jurisdiction.
3. Participation in tenders and government contracts. In some countries, a firm can participate in tenders and receive government contracts only if it has a certain amount of experience in the market.
4. Trust of investors and clients. Experience and resident status form the image of a reliable organization, which is important for attracting investors and clients.

With the acquisition of a ready-made firm, the time to market can be significantly reduced. Instead of creating a new firm from scratch, organizing new departments, or developing new technologies, you can simply buy a ready-made solution. Thus, selling companies is the best way to quickly start a business-activities or develop new markets and expand an existing business-structure.

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Market Research and Target Identification

When expanding your business-field by acquiring a ready-made commercial structure, you should make sure that some of the following aspects are sound and fully implemented.

1. You need to make sure that the market is “deep” enough and that the cash flow in the chosen area is capable of financially filling not only the entrepreneur personally but also a group of employees. The requirements for turnover and profitability are relatively high.
2. On the labor market there are specialists with the qualifications required by an entrepreneur.
3. The entrepreneur chooses a fairly stable direction (however, taking into account that the firm’s payback is a long process). Also, seasonal classes are not suitable for more or less serious business-activities.

In addition to the above, before purchasing a shelf-company abroad, it is important to carefully research the jurisdictions on offer. You must adhere to the following criteria when choosing a country.

1. Tax regime and business support. Explore the tax system, the availability of tax optimization opportunities, and support programs for entrepreneurs in different jurisdictions.
2. Requirements for documentation and business participants. Find out about the requirements for financial documentation, founders and directors of the firm, as well as the need for the actual residence of the owner in the country of registration.
3. Maintenance cost. Estimate the costs associated with maintaining and operating an organization in your chosen country.
4. Opportunities for growth and development. Think about the prospects for scaling your business-activities, optimizing logistics, and finding new clients and partners in a given jurisdiction.
5. Immigration opportunities. Consider obtaining residency permits or other immigration statuses for the firm’s owners and employees.

When choosing ready-made companies, it is important to primarily focus on the planned profit and development prospects. Thanks to this approach, it is possible to determine the optimal solutions specifically for your business niche. The more options you have to choose from, the better your chances of identifying the most suitable firm are.

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General Procedure: Negotiating and Structuring the Deal

Before initiating a transaction, it is necessary to make a full assessment of the acquired organization. When assessing a business-project, you should pay attention to the condition of machinery and equipment, current wear and tear, and the order in accounting and tax reporting. The firm’s reputation and legal reliability are also important.

The following checks are carried out first.

1. Checking legal purity: a lawyer checks the constituent and statutory documents, contracts with key employees, documents confirming ownership of real estate or lease agreements (including their terms), the presence of encumbrances (restrictions on transactions with property, shares, etc.), registration of a trademark, and conditions for transferring rights to it.
2. Checking financial data: turnover and profit indicators, financial statements, tangible and intangible assets on the balance sheet. No debts (to the tax service, partners, landlord, employees, suppliers). An accountant or economist will help you do this check.
3. Marketing check: competitive environment, influence of economic factors and seasonality, market size, product life cycle, brand assessment. To evaluate your marketing strategy, it is best to consult with a marketer.
4. Checking the reputation of clients and employees: now, as a rule, it is enough to type the firm’s name into a search engine to find reviews (however, not all of them can be trusted, but it is useful to take note).

So, the acquisition of a ready-made business-project includes several important stages.

1. Choosing a firm. At the first stage, you need to select a suitable, ready-made organization, based on the specifics of your activity, target audience, and planned development strategy.
2. Verification. Before you buy a foreign firm, make sure there are no debts and check the legal and accounting records to avoid possible problems in the future.
3. Preparation of documents. At this stage, you will need to prepare all the necessary documents for purchasing the organization and its subsequent re-registration with the new owner.
4. Alteration. After purchasing the business-project, you will be able to choose a different name for the firm and appoint new directors.
5. Opening a banking account and connecting a foreign payment system to accept payments.

Our specialists will accompany you at every stage of the transaction and will become your reliable allies when concluding potential fruitful cooperation.

The prospects for using and integrating a ready-made structure are as great and extensive as the entrepreneur himself desires. It is important to consider that when purchasing a ready-made firm, a businessman does not need to think about forming a professional team. As a rule, employees already have the necessary competencies and knowledge of the specifics of the business. If an entrepreneur needs to take part in the next tender or in a government program to receive subsidies, then purchasing a ready-made project will allow this to be done faster than opening a new organization.

Our specialists are always on guard for the most effective and fastest results for each client. Our professionalism is confirmed by hundreds of satisfied reviews. We keep pace with advanced technologies and are constantly improving in our field, exploring new horizons.

The author of this article is Denys Chernyshov – CEO and founder of the world-famous law firm Eternity Law International.