Our lawyers assisted a client with opening a business specializing in sale of electrical equipment
At the beginning of May 2018 our firm was contacted by a Client who wanted to buy already functioning business or a shelf company with a VAT payer status. Since we have contacts of numerous business owners willing to sell their corporate rights we agreed to take the work of the kind. Before starting the search our lawyers had a questionnaire for the Client in order to find out which particular entity he was interested in: with or without previous history of activities, what types of activities it was planned for and other significant aspects.
The Client was going to conduct electronic equipment trading. To do this, he already had a rented room. The Client said that he had originally planned to set up his own company, and had already come up with a name. But then he found out that that was a lengthy process, and he still would not immediately become a payer of VAT. Therefore, he decided to purchase an “off-the-shelf” company, but, if possible, he would like to give it a name that he had planned for his company.
Despite the fact that it was possible to start preparing documents for the sale and purchase of corporate rights of any of the existing companies right then and there, our specialists continued to communicate with the Client. After all, we need to be sure that the Client will receive exactly what he really needs. We asked when exactly the Client planned to start his work. And if the answer had been that everything was ready for him to start trading operations as early as the following day, and only the lack of a registered company and the need to go through all the registration procedures had stood in the way, we would have confirmed with confidence that he really needed an “off-the-shelf” company and we would be ready to register it on his name. However, the Client admitted that he was still waiting for the equipment, which was to be delivered the following week.
Then we advised the Client not to buy an “off-the-shelf” company, but to register, as he had planned at first. Despite the fact that he still needed a company without history, it was planned to change the name and location, and with the start of work he could wait until the beginning of the following month, so it would be easier and cheaper to register a new company. Since this was the beginning of the month, and if he started the registration procedure right then and there, he could make it to apply for a VAT tax payer status before the 10th day of the current month. Then the company would have the status of a VAT payer from the first day of the next month. After weighing all the pros and cons, the Client agreed to register a new company.
On the same day, our lawyers prepared the statutory documents of the new company, in accordance with the wishes of the Client, and organized a meeting with a notary to sign a notarized power of attorney for our employees. And also, with some effort, our specialists managed to submit documents to the state registrar on the same day. The very next day, the new company was listed in the Unified State Register of Enterprises and Organizations, and a few days later - in the register of VAT payers.
The Client was pleased that all his plans for his own business were put in practice. And once again we became convinced of the need for thorough legal advice preceding the provision of even simple legal services, since Client satisfaction depends on the correctness of the chosen strategy and the impeccability of its implementation.