Business Transfer buying information

There are plenty of good business opportunities in Spain. Choosing the right business will be one of the most important decisions you ever make. It is essential that you know what you want to do before you start looking. You will need to have a clear idea of the area in which you intend to operate. Make sure whatever you intend to do is suitable for the area in which you propose to operate.

 

Choosing an FBEAS agent

It may seem tempting to buy privately, but in every circumstance we would recommend the use of an FBEAS agent, who can be extremely useful to the purchaser. Your FBEAS agent will be bound by a strict Code of Practice so you can be sure of honest professional service.

Your FBEAS agent is in a position to offer the potential purchaser a wide choice of businesses and can often provide “The Perfect Solution”. If he does not directly have the clients requirements, he will be able to “Network” with other FBEAS agents through the FBEAS Property and Business Network.

Please remember, your FBEAS agent will not charge you for his services, his fees being paid as a commission by the vendor.

 

Types of business

As in the U.K. there are different methods of purchasing a business, for example :

1). FREEHOLD - Identical to the U.K. Where the purchaser buys the premises where the business is located.

2) TRASPASSO - Until recently this was the most prevalent type of lease, usually for an indefinite period. It normally consists of a perpetual rental contract and the owner of the TRASPASO has the right to sell on the lease to a third party. The purchase price would normally include the fixtures, fittings and goodwill. The law governing this type of lease has changed and as a consequence TRASPASOS are becoming a thing of the past.

3). FINITE LEASES - Similar to the U.K. Much more common in Spain now. Leases can be for any length of time i.e. 2, 5, 10, 15, 20 years etc. With or without a renewal clause.

4). RENTAL CONTRACT - Very occasionally available. A financial bond is normally required, which may or may not be refundable. Monthly rent pro rata is normally higher than other types of lease.

5). S.A. Companies – Similar to PLC company in U.K.

S.L. Companies – Similar to Ltd company in U.K.

S.C. Companies – Similar to partnership in U.K.

 

Buyer Beware

Please remember, if you intend to purchase an existing business with premises and you are not fortunate enough to be buying the freehold, you will be purchasing a lease, plus an amount for fixtures, fittings and goodwill. Subsequently you will be renting the premises from a landlord, who will require a deposit. There are several crucial points you need to check before paying over any monies. Your FBEAS agent will be able to carry out these checks in conjunction with your solicitor. The salient points are:

Business Plan - Try to predict every expense you can and work out the monthly outgoings. Obtain this figure for cost of sales and then work out how many sales you require to cover the outgoings every month. You can then decide whether this level of sales to be achieved is realistic. Making early contact with an accountant could prove to be very useful as they will have an idea of what can or cannot be realistically achieved for your chosen business from past experience. Make the plan and make sure you stick to it. The business you buy must support your needs.

 

Note – For the purpose of definition, where appropriate the words he/him/himself also indicate she/her/herself