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Buy business in Ukraine

Buying a Business in Ukraine, step-by-step procedure.

The most widespread form of buying operating business is the purchase of corporate rights. For the successful buying of business, it is necessary to conduct selection of businesses for sale according to required criteria. Initiator, during selection (analysis) business for sale, with the aim of buying the appropriate business, should base on such key aspects:

1) Study of the current market of Ukraine; identification of the most attractive sectors, directions of activity.

2) Evaluation of conjuncture of the market. Definition of basic criteria for the selection of business for purchase.

3) After definition of sphere or industry that is interesting, and definion of criteria by which a business for purchase will be considered, it is necessary  to enter the market with public proposal for buying business.

The main criteria in Ukraine at buying  business, firs of all, is a  real decision of owners regarding selling the business. This decision should be confirmed in the form of availability of the Investment Memorandum, prepared according to international standards. In this regard, the initiator must always request a Investment Memorandum. If it is missing, it may mean that owners of business are monitoring the value of their assets only, and the initiator could lose time and money for procedures of M&A. Always study and analyze  Investment Memorandum, it will give an opportunity to evaluate the investment attractiveness. Investment Memorandum, as the main instrument for selling business, shall include deployed and exhaustive description of the Business, condition for today, market and marketing component, targets and strategies of the given business, risks and liquidity, profitability and cost effectiveness, as well as possible plans for development of business and forecast for 3-5 years, based on the market analysis and conducted marketing researches.

4) Organization and conduction of negotiations.

5) The mandatory meeting with owners of business (even if available a Mandate for sale).

6) Development of Protocol of Intentions by Ukrainian lawyers and signing of Protocol of Intentions.

7) Conduction of Due Diligence.

8) Legal and Financial Expertise.

9) Conduction of Audit (definition of reliability of data of the Investment Memorandum).

10) Evaluation of Business. Alignment value of business.

11) Development of the optimal structure of the transaction, including development of the financial model the transaction. Optimization of taxation for transaction.of

12) Development of Sale and Purchase Agreement. Legal expertise of Sale and Purchase Agreement. Signing of Sale and Purchase Agreement.

13) Closing of the transaction.

14) Entry into the rights of the property.

15) Selection the management team \ development of the strategy (model) of business management and development of the business.

In the case of buying business in Ukraine it is important adhere to the following recommendations:

– do not use services of private of persons, because as a rule it is a fraud;

– do not consider Investment Memorandum developed by  owners of business, because market analysis and prospects for development etc. will be “adjusted” under the investment attractiveness;

– do not use the services of law firms \ companies, because Ukrainian lawyers serve only for law activities regarding preparation of legal documentation, and not in the interests of business (as worldwide);

– do not buy 50% of corporate rights, because Ukrainian owners (co-owners business) can block all business decisions.

Successful owning a business!

Buy Business in Ukraine

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