Establish tax efficient onshore and offshore Business Entities to Make Offers, Hold Assets, Operate Business, in order to be able to Optimize After Tax Income & Maximize
returns on divestment of businesses
Comfortably avoid the adverse effects of events in the economy, of which you have no control, industry problems affecting businesses in your sector, business operations – pertaining specifically to your business such as Contracts Creditors Labor Suppliers Customers.
Implement management systems which provide Liability Insulation and bullet proof asset protection.
Note: Tax management planning which you utilize in your own business can be be utilized to help improve the net result of your offer for sellers – equivalent to giving them more cash while acquisitions cost you less.
Additionally it conditions sellers to provide finance with deferred settlement reducing the immediate impact on the proceeds
of sale; enabling further
structuring of instalment payment and the interest consideration on seller finance arrangements which
can be built in to be of a capital nature – facilitating individuals behind a Corporate owner (dropping the Gains tax rate down from 21% to 15%).
Rarely included in a broker’s work for their clients is the opportunity for high yield low risk investment returns by offering a seller a better result than a straight out 100% CASH SETTLEMENT
retaining an equity position in the business A SELLER INVESTOR Keeps
a vigilant eye on their investment, and assists the new operators with supervision and advice.
The returns on such investing can be tax structured to yield significantly
The retention of a seller’s capital lowers acquisition costs, assists new owners by having a person with the most knowledge of every aspect of the business, and must help the buyer achieve better performance – for the mutual benefit of buyer and seller.
Regrettably Brokers are out to lunch when a buyer wants/needs capital – insisting that buyers table funds for acquisition – when the end result for their client can be vastly more money and a substantial return from investing the proveeds of sale with no immediate tax, a buyer can defer and ultimate help obliging sellers with tax deferral on the sale proceeds, great investment yields tailored to be tax free if warranted, opportunity to get part of the future earnings of the business which has new management, additional resources, new blood pumping in more capital, vision, enthusiasm, energy, application of new technology, modern equipement replacing old machines, and more talented perspnnel, better trained and able to apply modern technology, management and new methods to improve efficiency, raise productivity and better ROI being able to produce more at less cost, and making a lot more improvements than what the Seller ever could have while owner with limited knowledge and inadequate capital
Clearly both parties are able to achieve better financial outcomes by working together instead of allowing uneducated self-interested interfering brokers whose inept meddling costs sellers dearly to call the tune – which most do, to the detriment of sellers and buyers.
Look at the pathetic clearance rate of brokers overall of total listings and few individuals able to sell more than 20% of businesses which they promise to sell.
*Most brokers have
no understanding of Corporate Finance and Investment Banking techniques.
Not only is the hefty 12% fee they charge inequitable and mostly unearned the detriment caused by forcing sellers in to the tax pits – federal, state and local – can in high tax States such as California, impact on seller’s net result when their fee is taken in to account the final sale price by can be whittlled down by more than 40%.
Which makes their fee when based on what Sellers actually end up with to really be around 25%.
Note: those facts are never disclosed by Brokers to their clients – leaving them open to legal challenges to the fee agreements *(on grounds of non-disclosure and deceptive behavior).
Brokers behaving poorly with disregard to their clients conflicts with their fiduciary responsibilities under the terms of their engagement by clients, either as in the written words or implied obligations of their role.
If your broker refuses to amend or moderate their commission charges to be applied to become based on your ultimate after tax net proceeds instead of going to Court there are other legal methods open to sellers to either repudiate your agreement with the broker or simply avoid its application – by structuring final acceptance of buyers offers to be a Non-sale.