Business examination

Usually a comprehensive examination of a business includes the following procedures:

1.     Business valuation;

2.     Examination of the founding, registration and other legal documents of a business;

3.     Preparing a report on the history of a business;

4.     Examination of the rights of a business on the movable and immovable assets (property);

5.     Preparing a report on the rights of a business on intellectual property;

6.     Voluntary audit of the purchased business;

7.     Analysis of the contracts, within the framework of which, key business processes are carried out;

8.     Legal analysis of permitting documents of a business (the presence and duration of licenses, reports of regulatory authorities, etc.);

9.    Diagnostics of business processes of the purchased business;

10.   HR audit, assessment of employees’ professional background and qualifications, analysis of personnel records;

11.   Marketing assessment of the company's market position, the competitive environment, and the advertising policy.

For small business a list of activities for comprehensive examination is usually smaller, but the key parameters should be checked carefully. Most buyers of small business use expertise of founding documents and financial records, and licensing expertise. These parameters are to be necessarily checked by a consultant before offering business for sale that is why many of these services are free for the buyer. Buying a company that has undergone a comprehensive legal, financial, human resources and marketing expertise means hedging against risks that may adversely affect your business, both immediately after purchase, and many years afterwards.

This helps the buyer obtain in-depth information about the tax regime of the purchased business, the amount of taxes and fees, andrecommendations for optimizing the tax burden in the future. For example, for buyers of foreign companies, which have a constant interaction with customs authorities on primary activity, it is necessary to review tax or customs legal regulatory framework. The legislative framework often undergoes changes in terms of both the procedure for payment of taxes and duties, and in terms of tariffs.

Ready-made business sales, related to foreign trade, are often caused by changes of the customs regime which are adverse to the enterprise, by the development of legislation that brings “gray” schemes out of the shadows. Therefore scrutiny is essential before making a decision on buying a ready-made business which is based on import or export operations.