Company purchase and sale in Latvia is a complicated process as well as it is profitable. There are many issues to be considered in these processes. If these are not taken into account, problems may arise during purchase or sale process. As Investlatvia.net, we provide you the support that you need to get through these processes smoothly, within the scope of our consultancy service.
How does the process work in company purchase and sale in Latvia? Which complex stages do exist there? Which advantages does our service provide?
Purchasing a Company
Purchasing a company is a process that consists of different stages in itself. Progress should be achieved by considering all of these stages. This way, possibility of purchasing to be finalized positively will be extremely high. The first step at this point is preliminary consideration. If it is decided to purchase the related company as a result of preliminary evaluation, related purchasing process begins. Detailed information on these stages, which have great importance for company purchase and sale, is given below. [*]
Preliminary Consideration
Preliminary consideration is a detailed analysis of the company which is planned to be purchased. The company’s annual turnover, profit rate, location, total worth and similar indicators are taken into consideration. Then, requested price and payment terms are evaluated together.
While you are making these considerations, seller will probably want to see the financial power that you have. In other words, it can be mentioned that there is a mutual preliminary consideration process here. If the preliminary consideration, which is the first step for a company purchase and sale in Latvia, ends up positively, company purchasing process will be the next step.
Our expert team will provide consultancy to you about how to make the preliminary consideration, how to interpret data and similar subjects. Thus, you will be able to consider these stages correctly.
Company Purchasing Process
Company purchasing process consists of different stages. Beginning of a purchasing process may give the impression that related procedure will be finalized for sure. However, it would be wrong to say that related purchase will be made at the end of this process for sure. Stages of a purchasing process are as follows:
Research
Conducting a research about related company is considered as the longest stage in a purchasing process. At this stage, companies that have the desired characteristics to be purchased are looked for. Detailed researches are made from different sources. It is necessary to accept that this process will take long and it is also necessary to be patient. Being impatient can cause wrong decisions to be taken.
Offer Stage
When a company that is suitable for purchase is found as a result of researching, purchase quotation request must be properly submitted to the relevant company. Negotiations are made if related company finds the quotation suitable and acceptable. At this stage, detailed information about that company is obtained from authorized representatives. Likewise, those who sell a company may also ask for information on different subjects, especially about financing power.
Financing Support
Company purchase and sale in Latvia are processes that may involve high costs. In particular, authorities of the company to be purchased may want to see that their buyer has sufficient financing to cover respective cost before providing the information that is asked. In this context, if related purchasing will be conducted in cash, buyer’s bank account statements can be asked. If payment will not be made in cash, seller may request some financial data to understand how the buyer’s payment capacity will be in the future.
Financing required for a purchase can be met directly by related buyer or through some financing institutions. At this stage, financial conveniences can be provided as a result of mutual negotiations. However, even if these conveniences are not provided, buyer must make a prepayment and provide necessary capital for the company in focus so that it can continue its activities.
If financing requirement in company purchasing process will be covered by a loan, guarantee will be required. In addition, it is also important that credit history of the individual who apply for credit is clean. Apart from these, it should not be forgotten that additional documents may be requested by banks.
Completion of the Process
Until this point, a mutual agreement is made related with purchasing. In this context;
- >>> Under which conditions related purchase will be made,
- >>> Amount of shares to be purchased,
- >>> Clarifying issues regarding the payment to be made,
- >>> How company assets’ ownerships will be changed
- >>> And similar issues need to be fully agreed upon.
With the agreement, company purchase and sale contract is prepared and process is completed by signing it.
After signing a contract, necessary legal procedures are initiated for company transfer. After these are completed, company purchasing is completed.
Advantages That We Will Provide
This process is extremely long, detailed and sensitive. As Investlatvia.net, we provide consultancy to you at every stage of this process and use our expertise and experience in your favor.
We are looking for companies that can be purchased with the features and qualities you want. We participate in quotation process and create solutions about financing. Under favor of all these, we ensure that you buy the company which best suits your expectations at the most affordable cost. We also carry out complex legal procedures regarding company transfer that need to be done after purchasing process for you. We help you to complete the whole process of company purchase and sale in Latvia in the best way for you.
Company Sale
Making a company sale decision will affect not only your business life but almost every area in your life. Therefore, it is necessary to approach company sale very carefully and to manage this process professionally. By benefiting from company purchase and sale consultancy service which is provided by our expert team, you can get through this process flawlessly.
Company sale can be described as a difficult and complex process. This situation has caused a significant portion of company sales around the world to be made by consultancy institutions. Although some company owners want to manage this process by themselves, complexity of legal and administrative aspects of this process make it almost impossible. Therefore, attempts to sale a company by those who do not have expertise in this field either result in failure or wrong decisions are made in the process.
Company Sale Process
Company sale process consists of different stages. Information regarding these stages are provided below.
Company Evaluation
Company evaluation can be expressed as determining company’s worth. This stage is perhaps the most important part of a sale process.
Business owners naturally want to sell their company at the highest possible price, while buyers want to lower the price as much as possible on the contrary. This situation pushes a company owner to realistically determine the value of his/her company. Because in the case of that value is more than it should be, it may prevent the sale process from being completed. Similarly, low value means financial loss for company owners.
In order for a sale process to continue and conclude, seller and buyer must agree on the value of respective company. At this point, both parties should convey to the other party how they set the price. Thus, it will be possible to find a common way and agree on the price.
In company purchase and sale in Latvia, company’s incorporeal values should also be considered in order to determine the price in a healthy way.
It should not be forgotten that sometimes brand value of a company will drive its price up significantly. Therefore, incorporeal values should also be taken into account.
Company Sale Analysis
Company sale analysis is a process to determine whether the company is suitable for sale or not. The points to be considered are as follows:
- >>> Determining the company’s positive and negative aspects
- >>> Determining and evaluating the chance to sale the company in and out of the country
- >>> Identifying possible problems to be encountered during sale process
- >>> Identification of potential domestic and foreign investors
- >>> Answering special questions about sale
As a result of these stages, if buyer requests, Company Valuation and Sale Analysis Report is prepared and presented to buyer. Apart from this report, different information about related company may be requested by buyer. Depending on related sale process’s status, this information is given or not.
Company Sale Stages
Stages of company sale and general information about them are as follows:
Preparation of Introductory Files
Introductory files have great importance in company purchase and sale in Latvia. When you want to sell your company, you have to promote it in the best way possible. Therefore, preparing an introductory file that is containing the following information provides a great advantage:
- >>> Company history
- >>> Field of activity
- >>> Sectoral position
- >>> Personnel structure
- >>> Location
- >>> Sale price
- >>> Payment terms
- >>> Reason for sale
Preparation of Your Company’s Financial Statements
Investors and buyers want to see financial statements first for the company they want to buy. Detailed financial statements which contain company’s income and expenses should be prepared and shared with investors when requested. However, in these mentioned tables, investors want to see company’s 12-month and 3-year income-expense projections. This way, company’s current and near-past performance can be seen.
Marketing Your Company to Domestic and Foreign Investors
It is necessary to attract domestic and foreign investors’ attention during company purchase and sale in Latvia. For this, potential domestic and foreign investors should be investigated during sale process and company should be marketed to them.
These investors can be sectoral investors, individual investors and private equity funds. Private equity funds generally prefer buying only a certain percentage of large companies, while sectoral investors can buy all or a certain percentage of companies that draw their attention.
Evaluation of Offers and Conducting Negotiations
Negotiations on different issues are conducted at this stage between a company owner and an investors. However, as you can imagine, sale price and payment terms come first. Disagreements at this stage, where offers are evaluated and negotiations are made, may cause the sale to be canceled. Therefore, this stage should be conducted carefully.
Completing Sale Process
After full agreement regarding company purchase and sale in Latvia, company sale agreement is signed. This contract includes items such as company’s sale price, assets and liabilities breakdown, payment period and conditions. After this stage, company transfer is legally made and so, sale process is completed.
Advantages That We Will Provide
With the consultancy service we provide as Investlatvia.net regarding company purchase and sale in Latvia, you can get through this long and complicated process flawlessly. Our team, which has expertise and experience in this field, professionally evaluates your company and then get in touch appropriate investors.
Great importance is also given to confidentiality during sale process and all necessary care is taken to prevent you from losing prestige. Preparation of other documents, sale contract in particular, and execution of legal processes are conducted by our expert team. To take advantage of our consultancy services in this field and to contact us, click here.
