Sale and purchase of shares in a patrimonial company
Selling and buying shares in a patrimonial company is a professional matter!
What you need to know.
The promise of tax savings is not always there if the operation is not well prepared.
The hope for the seller? Not to pay capital gains tax!
The hope of the buyer? To save on registration fees and, above all, to make a better deal!
Not so simple:
- First, it is customary to share the tax latency. What is it?
Active tax deferrals include tax benefits that cannot be set off against the taxable profit of the year in which they were acquired or against that of a previous year, but which can be carried forward and set off against the taxable profit of a subsequent year.
- This is also referred to as liquidation surplus. Ouch, what is this?
It is an expression used to designate the sums shared by the partners of a dissolved company, after the assets have been realized, the creditors and the personnel have been paid and the contributions have been taken back. The "surplus" represents the profits that have not been distributed during the life of the company.
- Guarantees of liabilities
A "warranty of liabilities" clause is most often inserted in the contract concluded by two companies at the time of an acquisition or merger-division operation. The acquiring party will take control of the other company, and the warranty clause ensures that the absorbed company has no hidden liabilities, so that by carrying out this operation the acquiring party does not commit itself to any financial risk.
You know your company and the risks it could face, the buyer does not. He will be inclined to ask for reserves on the price paid in the form of a liability guarantee.
- The due diligence process
The buyer and his consultants will examine all the following points:
- Technical condition of the building that may give rise to a risk
Presence of asbestos
Presence of prohibited refrigerant gas in the air conditioning system
Compliance with fire regulations
Apparent or hidden defects
Check if there is a PPAS project in progress,
Check if there is a project of insertion in a perimeter subject to the right of pre-emption,
Check for the risk of a derelict building tax,
Check for any notification of the execution of the public management right,
Check for any risk of a decree or draft decreeing expropriation for public utility,
Check for the presence of a decommissioned, but atlas-listed, byway,
Verify the existence of a hidden easement for the transport of gaseous products,
Check if there are easements in a previous deed, not included in the title
Verify the situation in terms of soil sanitation,
Verify the urbanistic conformity, examination of the urbanistic and environmental permits
Boundary marking and measurement for reconciliation with the title deed,
- In-depth legal analysis
Ongoing litigation or risks
Professional or decennial liability
Analysis of contracts
Is the property free and clear of debt?
Contracts for the acquisition of any equipment or fixed assets and depreciation schedules.
Verification of the property title,
Verification of the existence of a decree or notification of a proposed asset protection measure,
- Tax analysis
Analysis of previous tax returns
Analysis of tax risks in general
As you can see, this kind of operation is a job for seasoned professionals.
The transfer of shares is a common operation in the sale of important assets structured as a company.
The complexity of this kind of transaction implies the intervention of experts whose cost, on average, varies between 15.000 and 25.000 € without VAT.
Our experience shows us that the sale of shares in a company whose real estate assets are worth less than 2,000,000 € is not the best solution to obtain the best income.
The number of enthusiasts for the purchase of a company and for the purchase of a property is not the same.
The buyer must be liquid or have real estate to put up as collateral for a loan. The law prohibits the buyer from relying on your real estate to obtain financing for the purchase of your shares.
Frankly, under 2.000.000 €, 90% of the purchasers do not have these financial capacities. The property dealers, yes... But they will apply a significant discount on the purchase of the shares and very often, the result will be less good than if you sold the bricks.
For companies whose assets are valued beyond that, it is on the other hand a real opportunity.
This is a matter for professionals!
We are able to apprehend these problems and help you to value your shares at best by basing ourselves first on a correct evaluation of the real estate assets.
We have gathered around us a task force of specialists who will be able to help you in this whole process. With the help of your chartered accountant, we will be able to offer you the best environment to sell or acquire the shares of a patrimonial company.