How to avoid risks when buying a business in Ukraine
Today, many Ukrainians want to have their own business. In order to save time and money, you don’t have to start a business from scratch, you can just buy business as corporate rights with real estate. Buying a ready-made supermarket, beauty salon, hotel, etc., makes it possible to start earning money almost immediately. However, there are risks. In order to avoid them, it is worth taking help of professional lawyers. The company “Bachynskyy & Partners” offers you its services.
What problems can arise when buying a business?
There are several basic problems that entrepreneurs often face when they decide to acquire a business together with real estate. Each of them can be solved if this is done in time. Here is a list of these problems:
- Sale by unauthorized persons;
- Unregistered workers;
- The complexity of the clearance sale;
- Restriction for foreigners;
- Sellers want to sell business only for cash.
Our specialists will gladly help you avoid these risks.
What can the problems lead to?
If the abovesaid problems would not be solved as quickly as possible, they can lead to very unpleasant consequences. Problems that at the beginning seems like a small thing can turn into serious complications for activities, and sometimes lead to a loss of business.
It often happens that a person who does not have rights to sell business is trying to do that. This situation can be either ordinary fraud or the result of mistake. For example, an enterprise may have several owners and sale they can make decisions only at a general meeting, where a minutes confirming their agreement is drawn up. If such document is missing, the agreement can be declared invalid and it is possible to sue the buyer in order to return the business.
A very common situation in Ukraine is people working unofficially at an enterprise. This allows the employer to save on taxes and salaries. However, this can lead to problems with government, as well as claims from workers themselves. It is also possible that the previous owner had arrangements that allowed him to avoid such troubles. Then the officials will demand bribes from the buyer, threatening them with courts and fines.
Now, it can be very difficult to conclude a contract of sale in Ukraine. First of all, it is the fault of the bureaucratic system that remains since the times of the Soviet Union. It is often very difficult to understand what is included in the contract, and what is not. Thereby, a person can think that he/she buys company as corporate rights together with real estate, employees and intellectual and material property, but in reality, you pay only for one of the abovementioned. Sometimes sellers use such scheme in order to deceive the buyer and get more money.
There are also serious restrictions on sale of companies to foreigners. Citizens of other states have no right to buy certain categories of real estate. Often, in order to do business in Ukraine, foreigners should hire a director – citizen of Ukraine. In addition, citizens of other countries find it difficult to communicate with Ukrainian entrepreneurs. The reason is both the language barrier and the differences in mentality.
Often Ukrainian sellers want to receive payment in cash. After several crises, they stopped trusting banks and they want to have a reliable “cache” in their hands. However, this position significantly complicates the sale process. It is not possible to issue cash when it comes to large amounts. In the case of foreigners, money has to be transferred from abroad. Such complications can completely frustrate the transaction.
Bachynskyy & Partners offers expert assistance
Our company has been providing legal services in various fields for many years. We offer our customers reliable business revision before buying and making the most profitable transaction. We conduct audits; we send lawyer requests, in order to make sure that the proposal does not have “pitfalls”. Thanks to many years of experience, we easily solve any problems that may arise when acquiring an enterprise.
Buying a business usually consists of several stages. The first one is a review. We survey together with the client the desired site; specify its parameters, advantages and disadvantages. After that, a preliminary purchase agreement is signed. Next, we carefully check the object and the documents for it. Sometimes it turns out that the seller needs to structure the business and issue additional documents. In such cases, we can recommend him another legal company that will deal with these issues in order to avoid conflicts of interest. After that, we check, if it is needed a permit from the Antimonopoly Committee for purchase and, if necessary, we help to get it. After that, the main purchase transaction is signed.
We have a lot of experience in such business transactions. We cooperated with buyers from the USA, Israel, Germany, Great Britain, Ukraine and many other countries.
How do we solve the problems?
Most of the main problems faced by people who want to acquire a business can be resolved. The main thing is to do it in time.
We check all the documents, accompany buyer at all stages of purchase and analyze the company’s statutory documents and information about its founders. Thus, we can ensure that the person selling the enterprise really has the right to enter into such a transaction.
To make sure that all employees are properly registered, we make carefully checkup of the existing contracts and involve our accounting department for revision.
During the purchase support, we analyze all the options (for example, the acquisition of the business itself with real estate, or appended corporate rights); we check their risks and choose the most profitable variant for our client. We create our own draft contracts, choose a convenient settlement system and attract a reliable notary. In addition, we explain the client all the nuances of making transactions, paying taxes and suchlike.
Thanks to many years of working with citizens of other countries, we are able to bypass any restrictions for foreigners established by Ukrainian legislation. We help to create a company in Ukraine if it is necessary, and we help to issue documents for residence and employment. Our specialists are fluent in English and can explain all the phases that should be taken to start a business in Ukraine.
We help the client to negotiate with the seller, explain all the advantage of the official calculation and carry out an international tax structuring of the business.
Buy business with our help
“Bachynskyy & Partners” company is capable of solving any problems related to the purchase of an enterprise in Ukraine. We have been consulting foreign investors and Ukrainian authorities for many years. We have specialized departments for some common types of entrepreneurial activities, such as IT- and agrarian business. In huge number of different situations, several departments work simultaneously on one case. Due to this, on every aspect of the case, is working an expert, who is the most versed in the required branch of work.
If you want to acquire a business without any problems and risks, please contact “Bachynskyy & Partners”. We will gladly help you to do this.