Taking over a business: step by step

10 indispensable tips for acquiring a business

Acquiring a business involves more than you might think. Valuation, financing, permits, personnel: these are just a few of the aspects you need to consider. Taking over a company is a challenging and often time-consuming process. That’s why we’ve gathered 10 indispensable tips to guide you step-by-step through this complex endeavor. Perfect for both seasoned entrepreneurs and newcomers!

1. How to determine the value of the business to be acquired?

Determining the value of a company isn’t easy. The price depends on supply and demand, market conditions, personal reasons of buyer and seller, and negotiation skills. There are three common methods:

Substance method: This is the value of all tangible and intangible assets minus debts and provisions.

Economic method: Looks at future revenues (profits, cash flows) and applies a discount rate based on risks.

Market method: Compares key figures of the company with those of similar companies recently acquired.

Check out the webinar 'How is the value of a business determined?' and get to know the free UNIZO valuation tool.

2. What financing options are available for a business acquisition?

Just like starting a new business, you will need financing for an acquisition. Many support measures for start-ups can also be used here. Click here for more info on financing a business acquisition.

On tax matters, seek advice from a tax advisor through our takeover guides.

3. What about social debts in the business to be acquired?

As an acquirer, you are subject to the social status for self-employed. Ask the transferor for recent certificates for no tax debts, VAT debts, NSSO debts, outstanding social contributions, and tax debts with the Flemish Tax Administration.

These concern the following 5 certificates - to be requested by the transferor - a maximum of one month old at the time of transfer:

1. Certificate of no tax debts (to be requested from the tax collector - Article 442bis WIB92; federal tax)
2. Certificate of no VAT debts (from the VAT collector - Article 93undecies WBTW)
3. Certificate of no NSSO debts regarding employed staff (from the NSSO - Article 41quinquies NSSO Act of June 27, 1969)
4. Certificate of no outstanding social contributions as self-employed (from your social insurance fund - Article 16ter KB no. 38 of June 27, 1967 social status of the self-employed)
5. Certificate of no outstanding tax debts with the Flemish Tax Administration. Article 3.12.1.0.14 Flemish Codex Fiscality (tax Flemish Region)

More info in the Overnamemarkt.be article about the acquisition of a business case.

4. What about the takeover of personnel?

The personnel transfer to the new owner, including employment contracts, seniority, and other rights. This applies regardless of whether it is a share transfer or a business case takeover. Agreements can be made about partial or no transfer of personnel, but the transferor then has to handle the dismissals.

More info on employee rights can be found in the collective labor agreement no. 32bis.

5. How to determine if all permits of the business to be acquired are in order?

Check if the environmental permit, building permit, and soil certificate are in order. You can find more information via the Public Waste Agency (OVAM).

6. How does the acquisition of a business proceed?

If you find a suitable business, start with a letter of intent (LOI). This document outlines the main agreements, conditions, and procedures to follow.

Then conduct a due diligence investigation to verify everything (annual accounts, contracts, etc.). If everything meets expectations, you sign the final contract. Engage a lawyer or notary for the official transfer and registration for legal certainty.

7. What should definitely be included in the purchase agreement?

Ensure a complete contract that clearly states all parts of the acquisition:

• Trade name, location, registration
• Assets such as materials and inventory
• Price and payment terms
• Profit and loss figures
• Personnel and employment conditions
• Confirmation of settled social security contributions
• Transfer of permits, insurance, and contracts
• Non-compete clause
• Acquisition date

8. What about taking over a store?

When taking over a store, you can liquidate the inventory without adding new products. Consider the effect on your customers. Existing loyalty cards and discounts must be respected.

9. What about the real estate of the business to be acquired?

The real estate where the business is operated is obviously one of the most important elements in a takeover.

Purchase of real estate

The first option is that with the transfer of the business case, you acquire ownership of the commercial real estate. This purchase must be recorded in a notarial deed, usually preceded by a private sales agreement or 'compromise'. Note, this private agreement is already binding unless express reservations are included such as "subject to obtaining financing". A common misconception is that such a ‘compromise’ can be unilaterally broken without more.

The private agreement or 'compromise' should include the following provisions:

• The identity of the buyer and the seller
• A clear description of the property
• The terms of the sale (such as the price)
• Any easements on the property
• The down payment made
• The timing of the payment of the sales price
• The moment of taking possession
• The arrangement of the property tax
• The notary(s) appointed
• The moment of drafting the notarial deed

Rental of real estate

It may also be that the transferor remains the owner of the business building and leases the building to you with a commercial lease agreement. Then you need to consider the commercial lease legislation. If the transferor is himself a tenant, first check if the commercial lease can be transferred and under what rules.

10. How to take over a company?

When taking over a company, you can choose to either take over the shares or certain assets such as clientele, business premises, equipment, business case, etc. Both options have different implications.

The takeover of shares

When taking over shares, you assume all ongoing obligations of the acquired company. For this, a private deed is sufficient; a notary is not required, but it is advisable to draft a legally binding agreement to avoid surprises later.

From a tax perspective, a share transfer is usually neutral. The company continues the same depreciations and the seller pays no tax on the capital gain on the sale of the shares.

Note that assets of the acquired company cannot serve as collateral for acquisition financing unless strict conditions are met. Therefore, you will need to find additional collateral.

Additionally, as the acquirer, you must take over the existing personnel under current conditions.

The takeover of assets

When taking over assets, you can choose which parts of the company you want to take over. This offers more flexibility, but the shareholder of the selling party initially receives no direct proceeds; the company receives the takeover price. Corporate tax must be paid on this capital gain, but reinvestment can spread this tax over time.

For financing an asset acquisition, it’s easier to get a loan from the bank as the bank can take direct collateral on the financed assets, such as a mortgage on acquired property or a lien on the business case.

Where can I find a business to take over?

On Overnamemarkt you will find hundreds of profiles of businesses to be taken over. Search by sector, location, or keyword. You are also in the right place for participations and business real estate.

Hopefully, these tips will make your business acquisition a lot easier!