How Much Is A Business Worth With No Income?

[listenup]

I have been offered work out of Thailand that I don't want to pass up.

Over the last 2 years I have been building my own business here in Bangkok and will either need to sell or close it.

If I sell, I will want to take the "revenue generator" with me, as it brings in a nice steady income every month.

So, I'll have ready trained staff, company web site, an office in Bangkok and a limited company... How much is this worth?

Any advice is much appreciated.

Thanks,

Chris

[A_Traveller]

Not sure I understand this, but you'll take 'revenue generator' with you?

By definition, on that basis your business is worth little to nothing surely since you have no tangible assets, only the 'opportunity' to pay rent, salaries etc.. Think you need to clarify this some more.

Regards

[soundman]

A business for sale with non-disclosed assets, no income with the only asset generating revenue taken away & only liabilities. Hmm... I'll pass on that opportunity.

Soundman.

[junkofdavid2]

i think he means "how much is the company 'shell' worth", which may save others the "trouble" of setting up their own company, and/or allow a new owner to obtain a work permit.

not much.

Sunbelt can set up a brand new company with very proper documentation for foreigners, for about 70k, if i remember correctly.

as for the "asset" of highly trained staff... "highly trained" in what??? if you bring the "income generator", what good is this staff?

[colino]

may be a good will payment

[mrt273nva]

Sunbelt can set up a brand new company with very proper documentation for foreigners, for about 70k, if i remember correctly.

Just make sure that they aren't charging you for things you don't need. They registered me for VAT. Then I found out later that i didn't need it because my revenue won't be reaching a certain amount. Now i have to wait 3 years to have it canceled, or just set up a new company. Considering how difficult it was for me to get everything set up the way i wanted it, i guess i'll just wait 3 years and pay the VAT in the mean time.

(sorry, a bit off topic, but you mentioned Sunbelt Asia and it reminded me of what they did to me)

Edited April 7, 2007 by mrt273nva

[soundman]

may be a good will payment

Why would you pay "good will" for something thats not worth anything?

Soundman.

[Aussietraveller]

The business has its main revenue stream removed...

Does it have any assets?

Does not seem to be worth a lot..

[listenup]

Thanks for the responses so far.

Instead of just closing it, I thought someone would like, as junkofdavid said, a shell.

It's an Internet Marketing Company. There are 2 sides of the business a) our own portfolio of sites (Which I want to take with me) and our recent venture working on clients sites. If I sold the business, I would include the later. The new owner can then start to build up his own portfolio of sites like I have done.

There is no way I would have been offered my new role without training the staff and their willingness to help, learn and dedication. This said, they are a huge asset.

Edited April 7, 2007 by listenup

[A_Traveller]

On the basis of your reply, what about a staff buy-out, given their quality and expertise?

Regards

PS Is is the company where you wanted to remove a Thai Director?

/edit typo & add PS //

Edited April 7, 2007 by A_Traveller

[junkofdavid2]

Sunbelt can set up a brand new company with very proper documentation for foreigners, for about 70k, if i remember correctly.

Just make sure that they aren't charging you for things you don't need. They registered me for VAT. Then I found out later that i didn't need it because my revenue won't be reaching a certain amount. Now i have to wait 3 years to have it canceled, or just set up a new company. Considering how difficult it was for me to get everything set up the way i wanted it, i guess i'll just wait 3 years and pay the VAT in the mean time.

(sorry, a bit off topic, but you mentioned Sunbelt Asia and it reminded me of what they did to me)

i was registered for VAT too... and would much rather not have it (it's complicated and it sucks!). However, I believe we need to be VAT registered for our work permit (if you're a foreigner).

But I agree that Sunbelt's staff "automatically" sometimes does things which "might" be un-needed, since most of the other Clients require it, or in other cases, they don't fully explain whether something is needed or not and simply ask you if you wana have them be the ones to file your this and that....

For example, they asked me if they would be the ones to file for my former employees' (whom I hate) PND 91 for 1,000 baht EACH (that's a lot of money!).

Obviously, as a foreigner, I was under the impression (when the sunbelt staff touted the service) that I was under obligation by law to have this thing done (or maybe i might get in trouble with government)... only to find out later that it's the individual former employees' own responsibility to file it himself, and that they (not the company) who would get in trouble if he/she didn't file it, and that it wasn't our company's obligation to "push" them to do it.

What a waste to do this expensive "favor" for former employees who ripped off my company!

Note: Sunbelt staff didn't mislead me or anything about this... we were just not properly informed. I believe it was unintentional, but they just touted it because most of their other Clients have it done by them as well.

So yes, I agree with you that you should study the matter first before accepting certain services from your lawyer.

Other than that, I praise Sunbelt for the best Work Permit service ever.

Edited April 8, 2007 by junkofdavid2

[Thai-Spy]

Assuming the buyer doesn't want it as a going concern, but just as an alternative to establishing a new company...

Longer answer:

If the company has no liabilities going forward (especially liens, loans, taxes and termination obligations to unwanted employees) and no assets, its value is only the difference in cost between a cold start-up and the cost to legally transfer its ownership, change directors, amend the charter or by-laws, etc., plus the slight benefits of having an operational history (esp. tax filings and annual audits) for prior years and the fact it may be grandfathered in for some other valuable considerations.

Shorter answer:

Unless there's something truly unusual about it, the formal structure of the company is likely worth 10's of thousands of baht, but not 100's of thousands of baht.

[A_Traveller]

Since the OP has not responded to the in-house purchase suggestion, may I point out that IMHO there may well be legal issues here anyway. On the basis of the description, the income stream is derived from website business which presumably was contracted to the company, not the OP.

I'm not sure that, even with 49%, the OP has the right to take that business from the company as it stands without compensating the company {and/or its employees who would be the main losers here it seems} for the loss since the company is a legal entity with rights.

Closing will of course require that the OP compensate the employees who lose their jobs as provided for under Thai legislation as well as making the required payments to close the company.

Regards

[Sunbelt Asia]

Sunbelt can set up a brand new company with very proper documentation for foreigners, for about 70k, if i remember correctly.

Just make sure that they aren't charging you for things you don't need. They registered me for VAT. Then I found out later that i didn't need it because my revenue won't be reaching a certain amount. Now i have to wait 3 years to have it canceled, or just set up a new company. Considering how difficult it was for me to get everything set up the way i wanted it, i guess i'll just wait 3 years and pay the VAT in the mean time.

(sorry, a bit off topic, but you mentioned Sunbelt Asia and it reminded me of what they did to me)

If you have a work permit in a corp, you are required to be in the Vat system no matter if you reached yearly sales of 1.8 million Baht or not. ( Exception iif you sell books)

As for getting out of Vat filing. The Thai government will simply tell you " Just don't file for six months, your Vat status will be terminated." If however you want to reinstate it later. You will need to pay a fine of 500 Baht per month if you use the same Vat address.

junkofdavid2,

Very sorry you had a problem with us filing the PND #91. We do it for our employees and many other clients do it as well for their employees. Pm me and I'll credited your account with the 1,000 Baht.

Other than that, I praise Sunbelt for the best Work Permit service ever.

Thank you.

www.sunbeltasiagroup.com

.

.

[junkofdavid2]

From Sunbelt: As for getting out of Vat filing. The Thai government will simply tell you " Just don't file for six months, your Vat status will be terminated." If however you want to reinstate it later. You will need to pay a fine of 500 Baht per month if you use the same Vat address.

If you're still currently in the VAT system, isn't it illegal to not charge/file/remit payment for VAT?

Edited April 8, 2007 by junkofdavid2

[Sunbelt Asia]

From Sunbelt: As for getting out of Vat filing. The Thai government will simply tell you " Just don't file for six months, your Vat status will be terminated." If however you want to reinstate it later. You will need to pay a fine of 500 Baht per month if you use the same Vat address.

If you're still currently in the VAT system, isn't it illegal to not charge/file/remit payment for VAT?

If you are collecting Vat and not giving it to the government it is illegal.

If you have no income, and file "0" on your monthly returns or don't file, after 6 months you are automatically deactivated.

www.sunbeltasiagroup.com

[junkofdavid2]

From Sunbelt: As for getting out of Vat filing. The Thai government will simply tell you " Just don't file for six months, your Vat status will be terminated." If however you want to reinstate it later. You will need to pay a fine of 500 Baht per month if you use the same Vat address.

If you're still currently in the VAT system, isn't it illegal to not charge/file/remit payment for VAT?

If you are collecting Vat and not giving it to the government it is illegal.

If you have no income, and file "0" on your monthly returns or don't file, after 6 months you are automatically deactivated.

www.sunbeltasiagroup.com

what happens if you are still in the vat system and do have monthly income (but obviously less than 1.8 million p.a.) and you want to get out of the vat system?

Can you simply stop charging VAT to your customers and not pay it to the government for 6 months?

Or, can you "un-file" for it?

cheers,

David

Edited April 9, 2007 by junkofdavid2