You do not need to found a business yourself; you may acquire

• the entire business operations or a business unit • the entire enterprise engaging in business • a share of the company's stock or a share in a partnership.

The object of a business acquisition usually includes the fixed assets and inventories (machinery, equipment and inventories), the business name and goodwill. The premises may be transferred to the new owner by means of a transfer of lease. Goodwill is formed on the basis of the business organisation, its client base and brands. The advantages of acquiring the business operations include that the acquisition applies to specific asset items and the customer base, for example, but all old tax liabilities and other hidden risks remain with the selling enterprise.

When acquiring the entire stock of a limited liability company, the company is transferred to the new owner with its liabilities and assets. The buyer should carefully study the financial position of the company before the acquisition. The analysis requires financial statements for at least 2 to 3 years and recent intermediate financial statements. Expert advice should be sought for determining the financial value of the acquisition. The buyer often assumes responsibility for the seller's debts. This saves the need for new credit negotiations. The buyer must investigate all the seller's liabilities, such as any pending additional taxes. The sales contract shall indicate the date until which the seller is liable for taxes.

You can also become a partner in an existing enterprise. It is possible to purchase a share in a general or limited partnership or part of the stock in a limited liability company. You can join a cooperative by paying the participation share.

When acquiring stock in a limited liability company or shares in a general or limited partnership, the company or partnership continues its operations as before. The buyer should investigate the state of the enterprise by studying the financial statements before the acquisition. It should be kept in mind that if more than one-half of the stock of a limited liability company or shares in a partnership changes hands, old losses are no longer deductible. The partners in a general partnership and general partners in a limited partnership are liable for the partnership's taxes for the entire tax year in which the sale is executed. The shareholders of a limited liability company are not liable for the company's taxes.

The following should be investigated before the acquisition:

• Are the operations profitable? • How much debt does the enterprise have (in a general partnership or as a general partner in a limited partnership, you are responsible for the partnership's liabilities with your entire personal property)? • What is the volume of orders in hand? • What is the future outlook for the enterprise and the sector? • How is your partner as a person; can you trust him or her, do you get along with each other?

The assistance of an outside expert is required for the investigations in order to avoid any surprises in the future.

Determining the Value of an Enterprise

The buyer?s first problem is how to assess the enterprise that is to be acquired: is the asking price correct and what are the enterprise's possibilities for success in the future.

There are two principal methods for determining the value of an enterprise: the substance or asset value and the productive value.

In addition, the discontinuation value can also be calculated. This indicates the amount of cash left in the company if the operations are discontinued, all assets are sold and all liabilities are paid off. The discontinuation value is the lower limit for the sale price, particularly from the seller's point of view. It can often be negative as well.

Information about enterprises and business operations for sale is available from the Yrityspörssi Web site of the Federation of Finnish Enterprises and the Chamberbusiness Web site of the Central Chamber of Commerce.

The Invention Market of the Foundation for Finnish Inventions offers product and business ideas for entrepreneurs, funded by the Foundation. The information can be found below Invention Market on the Foundation's website.