Free Legal Advice Philippines
Would you like to react to this message? Create an account in a few clicks or log in to continue.
Free Legal Advice Philippines

Disclaimer: This web site is designed for general information only and does not create attorney-client relationship. Persons accessing this site are encouraged to seek independent counsel for legal advice regarding their individual legal issues.

Log in

I forgot my password




You are not connected. Please login or register

Buying shares of a private company

3 posters

Go down  Message [Page 1 of 1]

1Buying shares of a private company Empty Buying shares of a private company Thu Nov 13, 2014 5:52 am

Melman


Arresto Menor

Hi everyone! I am planning to buy shares of a small private company. I would like to know what are the things that I should do? The company is a corporation which mainly deals with fit-out works.

Appreciate any comments and advice.

Thank you.

2Buying shares of a private company Empty Re: Buying shares of a private company Mon Feb 16, 2015 9:05 am

taxconsultantdavao


Reclusion Perpetua

first. you need to identify yourself if you are an alien or not.

second. check with the sec if it is a registered corporation or not.

third. know the person whom you are dealing with. he might not be connected with the company.


fourth. check the financial statements if it is worth buying for.

fifth . ask people around regarding the operation of the company.

sixth. check the pros and cons of starting a new company or just buying a share with that company. remember that if you buy a minimal share or not a majority share, the management control rest not on you but on the person or block who hold such majority share. your investment goes down with any mismanagement or bad decision they will make

seventh. seek the advice of a financial consultant or lawyer

3Buying shares of a private company Empty Re: Buying shares of a private company Tue Feb 17, 2015 8:52 pm

Lunkan


Reclusion Perpetua

When VALUING a company, then it's TRADITIONALY done like this:
1. "scap value" = the value of THINGS, which can be SOLD SEPARATE.
2. a) Business total RESULT* for the last 3 years.
b) OR if it's new or improved much during the last years, you can count 3 x last year RESULT.
c) OR IF it's a research company or such and finnished something big recently, then it can be ok to count 3 x EXTIMATED profit. But what YOU estimate it too, NOT just count what seller estimate it too. Many sellers/developers are to optimistic Smile

*Don't do as many do = mix up Revenue with Profit. Many people value high reveue high, although low or no profit !!! = WRONG Smile in many cases. High Revenue ISN'T worth anything, if it can't be transformed to profit...

p1 + p2 = company value. Then split with how big part you are offered.
Don't forget when OTHER have the control, they can "sneak away" profit to OTHER company than the one you have part of. So much in the "valuing" is who has the control, is he/they trustworthy and skilled.

Sponsored content



Back to top  Message [Page 1 of 1]

Permissions in this forum:
You cannot reply to topics in this forum