The problem that may hinder immigration

Masha S. (her real name was changed to preserve the confidentiality of the client) bought a company that had a dozen cars, including quite expensive ones.

Not quite believing her good fortune, the girl began to prepare the documents for the immigration petition.

But the immigration lawyer upset Masha by saying that there were contradictions in property documents and tax reports. The seller promised to fix everything by transferring the property to the company.

After some time, new certificates of ownership were ready, but the owner was billed $30,000 for this (tax must be paid for the transfer of ownership). Since the seller flatly refused to pay these costs, Masha had to pay the entire amount because she had no other alternative.

This story illustrates the main problem of company owners who often take ownership of themselves or others, but not all the facets of the company itself. During the verification process, the buyer may miss this information and purchase such a company. The seller, unfortunately, is not be prevented from refusing to correct these contradictions and to replace the property documents because it costs him money.

Although this story is not positive, there are many examples of how people achieved their goal thanks to experienced lawyers and brokers. How to move to the USA by buying a small business, read our article.

What you need to pay attention to in order to avoid being in Mary's place:

  1. Documents for fixed assets (in other words, documents on ownership). Cars and buildings, for example, may be registered with a company other than the one being bought. As a result, the seller can take the property after selling his business, and you cannot do anything about it.
  2. In some cases, tax reports contain what has long been sold and written off, but don`t contain what currently owned in reality. It is necessary to carefully compare reality with what is written. In case of inconsistencies, require the business owner to correct the documentation. Read more about verification of tax documentation in our article.
  3. There is such a thing as a service schedule (if we are talking about a complex mechanism, such as an airplane). The maintenance schedule includes the actions that must be taken on the equipment to keep it operating. There is also a schedule for the decommissioning of units when they need to be removed and replaced with others. It is possible that immediately after the purchase you will have to spend millions of dollars on this. When checking a business, it is necessary to check the degree of depreciation and amortization of property. There have been cases where a buyer purchased a taxi fleet of hundreds of cars, and all the vehicles were completely worn out. Such surprises can not only lead to a change in cash flow but also jeopardize the company's activities as a whole.
  4. Efficiency. The contract usually implies the wording: "the equipment is transferred in working order, but in the as-is condition." Half of the equipment may not work.
  5. There are ownership rights. In most cases, cars are registered to the owner. When you buy a company, everything should be assigned only to the company. If the registration renewal is not done before the closing day, the owner will say that he will not pay sales tax. This can cost you tens of thousands of dollars, depending on the property.

You can learn more about how a business audit should be conducted in our class.

What is important to remember:

Проверка основных фондов на что обращать внимание 3

  • You should always check the ownership of the property. It must be registered with the company.
  • Re-registration of documents should take place before closing the deal since after that the owner will most likely refuse to pay sales tax.
  • Check the performance of the equipment, as its repair can result in high costs for you.

And remember that a quality broker like INVMAG will help you all the way through buying a business. Find out what a good business broker should do here.

Read What Our Clients Say (Google Reviews)

  • Absolutely thrilled with my experience at Florida Buy and Sell and especially working with Alyona! She was professional, courteous, and incredibly knowledgeable, making my business buying transaction smooth and hassle-free. Their expertise and dedication to customer satisfaction really stand out in the industry. Highly recommend for anyone looking to buy or sell business with confidence. A true gem in Florida’s market!
  • I enjoyed working with Alyona Safonova as a business broker, and I cannot recommend her highly enough! Alyona is a true professional with a deep understanding of the market and a talent for finding the perfect match for her clients. She guided me through the entire process with expertise and patience, always available to answer my questions and address my concerns. Her dedication and hard work resulted in a successful sale that exceeded my expectations. If you're looking for a knowledgeable, reliable, and results-driven business broker, look no further than Alyona Safonova! 💼👍
  • I've been dealing with Florida Buy and Sell in my professional capacity as an immigration attorney assisting foreign individuals in buying businesses in the U.S. I can attest to the high degree of diligence displayed by Florida Buy and Sell in all business transactions I witnessed. My primary point of contact, broker Alyona Safonova, has always been responsive to my clients' inquiries and meticulously collected all financial documents necessary for the effective transaction.