Buying an active entity, means you acquire all its customers, supplier network, reputation, and business conception. To do so, you must find a suitable one for yourself, a broker, or another party. Before the acquisition, it is advisable to find out about the condition and value of the company and check all the risks associated with the purchase.
You also have the option of purchasing a pre-existing business off the shelf (an enterprise already registered and functioning in Finland). The shelf enterprise has been registered by the laws of Finland and includes all of the necessary documentation and information for getting the business off the ground. There is no financial history or debt that has been incurred on the business because it is dormant, which is a major draw for many people, particularly those who are citizens of other countries. Additionally, there is no stress of doing any paperwork or bureaucratic-related process for entity registration.
To acquire a shelf enterprise in Finland, ensure to buy the legal form convenient to you, you can open a bank account and a registered address. You can acquire a shelf company from a broker, agency, or legal firm.
Things to consider before buying an active company
The process of buying an active business in Finland is complex. As an entrepreneur, you need to analyze your acquisition decision. The process includes:
Business Type
Select a business of interest that suits your skills and expertise. There is a bit of risk reduction when you concentrate on a section where you have experience and knowledge.
Business prospect
Investigate the potential of the company as well as the existing market conditions that you will be up against. It is recommended that you do not purchase a company that is towards the end of its lifetime or has a terrible reputation.
Structure
You acquire all its customers, supplier network, reputation, and business structure by acquiring an active company. You need to seek their consent and look for how to work with them.
Approval
Seek help for the acquisition of the company from the regional development company, brokers, and legal experts.
Business acquisition
During negotiating with the seller to acquire an entity, ensure that the following are in place:
Share status
Check if the seller owns all the shares of the company or if the seller has the right to decide for the company. Ensure to issue a letter of intent on the rules observed by both parties in the transaction.
Due diligence
Carry out a due diligence review on the company by yourself or hire an expert to do so. This is to reveal the condition of the company and all the risks associated with the acquisition. Check the risk that concern ownership, permits, licenses, taxation, agreement, and contract.
Important record
Ask for details from the seller that you need to know before acquiring an entity and examine the financial statement and other documents carefully.
Valuation
Hire an expert to evaluate the entity and determine if the purchase price is suitable. The price depends on if you are buying the whole shares or if you are buying the assets. Know that the assets include business operations and taxation.
Considerations to make before acquiring a shelf company
- Decide on the entity you wish to buy
- Decide and choose the legal form of your company such as:
- limited company
- limited partnership
- limited liability partnership
- public company
- Choose a suitable business name or use the existing name
Note that any changes made by you should be filed in the Finland commercial register, obtain a tax number, create a bank account, and obtain the necessary license or permit.
