#JerrysNotes 18 – Do This When Acquiring a Company with Legal risks
We had lunch with one of our mentors yesterday and he told us that his company was contemplating on buying another company.
However, that company has under-declared its sales and income by tens of millions of pesos.
So I got curious and asked him, “How do you acquire such a company with tax and other legal risks?”
He said, “First of all, you don’t acquire the original company. What you do is ask the owner to set-up a new company and transfer all the assets and the Intellectual Properties to that new company.”
Then he continued, “That’s the one you buy so that you don’t inherit the legal problems of the original company!”
I thought that was a brilliant move that I need to share with all of you. Do you agree?
I know this might not be applicable to us right now but hey, it might be useful in the future.
We all want to grow our businesses, right?! And one way of growing fast is acquiring another company.
So bear this advice in mind when the time comes that you are ready to acquire a company. It might just save you a lot of headaches and perhaps millions of pesos…
And most importantly… don’t ever forget to treat the one who shared this advice to you (me!)! 🙂