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Buy a company with an electricity license with a story: when is it profitable?

In June 2020, we were contacted by a Client who was going to participate in tenders for natural gas and electricity supply. And although he had his own recently registered company, it did not fit the terms and conditions of the tender, as it was required to have “experience” of at least six months.

That’s why the Client was interested in our two existing ready-made companies with Electricity Licenses for sale, and wanted to get the answers to the following questions:

  • How quickly can I re-register ready-made companies after purchase?
  • What is the procedure for re-issue of the documents, given the ready-made Electricity Supply License?
  • Can I use purchased ready-made energy companies to participate in the tender?

We provided answers to all the above questions and promptly reissued the documents for the new owner.

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Checking a company with a history before the purchase

The desire of any businessman when buying a company with a history is to make sure that the history of the existing company is clean. This gives you a guarantee of doing business safely and the opportunity to work comfortably, without fear of getting any problems in the future.

Companies for sale are usually divided into two types:

  • Those that have a business history and for some reason are no longer needed by their owners;
  • Those that were created specifically for sale.

Having a great experience both in company registration and in support of  agreements for purchase and sale of not our firms, we can assure you that it is better to choose the second type, because in case of operating companies the probability of buying a “pig in a poke” increases many times. Although you can check the company’s debts, you may not be informed of some contractual relations.

For example, it is theoretically possible that the company has not passed the license check and got a specific period of time to “bring it in line with the licensing regulations”. The owner of such a company, instead of correcting the situation, may decide to simply sell the company quickly, receiving additional funds for an allegedly valid Electricity License. As a result, the new owner, having bought the company without debts, receives a visit from the controlling authority, a conclusion that the shortcomings have not been corrected, and as a result - the cancellation of the license.

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The purchase and sale procedure must be properly arranged

What do we mean? First of all, there are many minor nuances in the process of business title reissuance, the omission of which can lead to the loss of time, money, or the need to solve problems in the company’s future activities.

When buying and selling corporate rights to a legal entity, a certain list of documents must be certified by a notary, using special blanks of notarial documents. So, when selling our company, we personally check the preparation and correctness of all documents.

It should also be taken into account that since recently, when making changes about the legal entity, it is necessary to update the information on the final beneficial owners. The package of documents to be submitted to the state registrar shall include a notarized copy of the passport of the final beneficiary (passports in the form of ID-card do not need to be notarized). 

Read more about the new rules concerning final beneficiaries here.

Please note! Our lawyers ensure proper planning of the agreement execution, where all necessary documents are signed and certified in one day and do not extend to several visits to the notary.

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As for the Client, he got two ready-made companies with Gas and Electricity Licenses quickly and without debts. Our lawyers completed the entire transfer and re-registration of the companies in three business days, which allowed the Client to prepare for participation in tenders in advance.

If you need a ready-made company with a business history and a Gas or Electricity License, don’t hesitate to contact us. We personally register all the companies for sale and provide all the necessary related services - from re-registration of the company to accounting services at the first stages.

Learn about available companies for sale here

Learn about the process of inclusion in the electricity market here

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