| This
section provides some advice for those looking
to buy an existing business.
If you are planning on setting up in a self-employed
(Autonomo)
capacity you should read the
Working in Spain: The Self-Employed System
section.
The first
most important thing is choosing the right
business
for you. Remember that restaurants
and bars
have late opening hours (2am+) and are normally
open 7 days a week (see the Last
Orders?
feature), and that shops
in general open 9.30am-2.00pm and again
5pm-8pm. Make sure the location is right
(remember location, location, location),
and that you can communicate with the clientele
(you may need to speak or have someone who
speaks
Spanish).
Types
of company
Empresa
Individual –
Equivalent to a Sole-trader
where the company is licensed in one person’s
name only.
Sociedad Civil
–
Equivalent to a Partnership
where several individuals are entitled to
work under the same license.
Sociedad Limitada
(S.L.) –
Equivalent to a
Private Limited Company
with registered shareholders and a minimum
trading capital. Audited accounts are required
and higher company tax rates apply than
for sole-traders and partnerships.
Sociedad Anonima
(S.A.)
– Equivalent to a Public
Limited Company
with shareholders and a larger minimum trading
capital. Audited accounts are required and
higher company tax rates apply than for
sole-traders and partnerships.
Things
to check
If you are buying
the freehold to the property, check
with the property register that the seller
is the registered owner
and that the property
is free of encumbrances.
If you are taking
over a rented/leased
property, make sure you see and understand
the contract
you are to take over and that the landlord
is made aware of, and is in agreement with,
the transfer
of the contract as you will need their signature.
You may wish/need to re-negotiate
the terms with the landlord.
Make sure there
are no outstanding
debts against the business by the
State
in terms of taxes,
social security,
rates,
employee benefits,
fines
etc.
Make sure
the business
is legal
– i.e. registered to trade and has
the correct licenses
with the appropriate authorities
– e.g. An Opening license from the
Town
Hall,
a Tax
Office Trading license,
a Tourist
Board Operational license,
a Sanitary
license
from the Departamento
de Sanitas.
If you are going
to handle food then you will need to obtain
a food handling
certificate by sitting an exam at
the local Town
Hall.
Make sure
you check the
Employee contracts.
All liabilities for accumulated benefits
and social security pass to the new owner.
Any redundancies can also be expensive and
complicated.
Get the
business
valued.
There are many ways to value a business
taking into account turnover,
profit,
assets
and goodwill.
Unless you have experience
of this, it is worthwhile
getting a professional valuation by a lawyer
or asesor.
Have a
Business
Plan
showing realistic income/expenditure ideally
based on past/existing performance of the
business. In addition, a cashflow projection
is a must so as to ascertain the working
capital
you will require.
Ask the
owners, and yourself, why
is the business being sold?
Does the reason given seem justified and
tally with the accounts/figures provided?
Ideally, spy on the business before buying
it. How would you improve it and/or generate
additional revenue? Remember, it pays to
be suspicious and cautious!
The business
should be officially transferred at a
Notary’s office to avoid legal
problems.
Seek professional
advice
to guide you through the process and/or
deal with the relevant paperwork
and licenses.
See
also
Businesses for sale
in Spain (CLICK HERE to go to our Property section)
Working
in Spain
Buying
a Property
Healthcare
Last
Orders? feature
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