There are many people in Hong Kong who want to purchase a running business because there is a high chance of profit. The owners sell business in Hong Kong due to many reasons like he or she may want to establish a new business. There are many sellers who use tagline like business for sale, and you can know about these businesses if you want to invest in one. But it is important to hire the best business lawyer and accountant so that you can get help in paperwork.
Here are some other things that you should consider when buying the business.
- Ask about payroll and the sale taxes – In most of the states, even when you buy an asset of a business, then the authority of the state tax come for you, if they notice that the seller owned payroll, sales or any other business taxes. So, it is important to consider that the seller has employees and ask them that they are using payroll services. After that ask the authority of state tax to issue the clearance letter and mention that seller is doing the sale and using all the taxes on the closing date.
- Ask about how will handle the account receivable – There are only two ways to handle this, you can buy the account receivable at date of closing or let the seller handle it at his leisure. From both, the best way is to purchase the account receivable at the date of closing.
- Consider that you can assume the lease of the seller – It is important to consider whether the seller is leasing the property where he has his business. If yes, you should have to find out two things, the time of completion of the lease or the landlords want you to take up the lease of the seller without increment in rent.