Buy Business-change Co. Name?

[jombi]

I'm planning to buy a small snack shop this January. Ideally when the company is transferred to me I'd like to change the name of the shop at the same time. My question is two-fold.

1.) Is the process of transferring a company from one farang to another fairly straightforward?

2.) Anyone have any insight on changing a company's name at the same time that ownership is transferred?

Thank you.

Jombi

[Indo-Siam]

I am not fully familiar with your situation, and I am also not fully aware of all legal possibilities. So - just take these comments as indicating areas you should look into.

There are possibly two things going on here:

1. Acquistion of a store

2. Establishment or transfer of a company.

They are not the same things. In Thailand, all companies are effetively holding companies. They can pursue many activities simultaneously. If you buy a company (which means that you arrange for at least seven shareholders that you arrange to buy out the shares from the seven or more existing shareholders), you take on responsibility for ALL oustanding debts of that company - if it has co-signed a loan for someone else - you retain that liability. Long-term lease on property somewhere? You retain liability.

So - you should think carefully about purchasing a company - and you need to THOROUGHLY investigate.

What you may want yto do is form your own "virgin" comapny, and then use that company to acquire the assets of another company - via an asset purchase agreement. You then get those assets that you are interested in, but not any unrelated liabilities that might be stacked in a closet somewhere.

A holding company named XYZ Co. Ltd. may operate a number of different retail outlets - none of which do business under trade names that match the legal name of the company - that is normal. So - do not mix up the trade name with the legal name. When an outlet is licensed, the liecense will normally list the legal name of the license holder, and also the Doing Business As name of the venue. These need not be the same.

Let's see what comments other forum participants can add.

Good luck!

Steve

Indo-Siam Group

[jombi]

Thank you very much!

You've given me a much better idea of how I must proceed.

[Guest IT Manager]

I agree with Indo. You wnt to buy the place where the business is done, not the business itself. Apart from anything else, if the business cost more than about 50K, and the premises, stock in hand and "goodwill" valued at whatever they are assessed as being worth, I would recommmend forming a new company. As Indo says, you can trade as Bills Sandwich Shop under the auspices of papers of Tabithas Excellent Massage and BJ Co., LTD.

The holding company is named on the shop registration and if you sell alcohol it is on the licence for that as well as the one to sell cigarettes.

Bills Sandwich Shop is just a premises, not a company. Tabithas is the Company and can do a heap of things premised on the way your articles of association are written.

Form a new company so you don't carry "hidden liabilities" as well as "obvious assets". The cost is reasonable and the risks are a lot fewer than buying Somchai Smith Co., LTD, without knowing that Khun Somchai purchased a herd of 70 buffalo on credit 5 years previous and hasn't made the first payment.

Look at the premises do an accurate stocktake, assess value of stock in hand and equipment, fixtures and fittings then make an offer for that.

No value is "normally" attached to goodwill, however if it is a thriving business make a gesture towards advertising etc previously invested in. Then use your virgin company, Tabithas, to make the purchase.

All contracts in English and Thai, though both are binding in most places here. All copies signed by the parties. Have the translation certified, the extra couple of thousand will be a good investment if there are problems later pertaining to Somchais' buffalo purchase.

Hope it helps.