Property appraisal when transferring a business

An appraisal of the enterprises assets during the transfer process has the meaning of determining the value (including legal value and financial value) of the capital intended to be transferred, through which the buyer and the seller will decide the signing and performance of the sale and purchase contract.

When assessing assets, buyers need to follow the following procedure:

+ Determine the assets to be assessed:

Property Appraisal of the business consists of two main groups of assets
Group of tangible assets: Land, factories, office zones, means of transport, machinery, equipment, and materials used in production or operation.

Group of intangible assets includes:

First, the group of intangible assets subject to intellectual property rights includes copyright to works; industrial property rights to trademarks, inventions, industrial designs, layout designs of semiconductor integrated circuits, trade names, business secrets, geographical indications; ownership over a plant variety; ownership rights, use of technology, and transfer of technology; ownership of proprietary technology. technology is capable of development and dissemination ...

Second: Human resources of the enterprise, including: intelligence, knowledge, professional capacity, working capacity, operation of employees, reputation and capacity of members, Shareholders and other other key employees (including consultants, experts, the leadership team of the business);
Third: Business advantages and legal advantages of the business, including: The system of stores, distribution agents and network of customers, partners of the business in the market, market share that the enterprise are holding in the business field, the competitive position of the business in that field; Monopoly licenses, licenses for the conditional business sector, mineral mining licenses; The incentives apply to business or corporate projects.
Appraised assets need to be determined fully and clearly, through which the actual legal status of assets can be determined. Depending on the area of ​​activity and the specific legal status of the business, the Client or the lawyer or the legal counsel in the business, the buyer needs to identify the appropriate assets to be assessed.

+ Prepare a list of asset information to be assessed, send request to provide and conduct appraisal.
After determining the type of asset to be Audited, the purchaser makes a list of the assessed assets and information to be collected to ask the seller or your solicitor to provide them.

Tangible assets:

First, for assets being land and assets on land: The buyer needs to request for a certificate of land use rights, ownership of property on land, drawings, diagrams, decision to grant land use rights, ownership of property on land, land assignment contract, land lease and other information on origin of property, information on registration of property use right, expiry date use, the fulfillment of property obligations for land and land-attached assets, mortgage contracts, lease contracts for land, land-attached assets, and relevant documents. to actually exercise the right to use and own property and disputes over the right to use and own property.

Second: For the property as a means of transport, the buyer needs to provide the vehicles registration of ownership, technical documents, registration, inspection and certification. Compulsory liability insurance of vehicles.
Third: With assets being machinery, equipment: It is necessary to request to provide a list of assets that are machinery, technical documents and documents proving the origin and quality of machinery and equipment. .
Fourth: Assets are raw materials, goods in use: The Seller needs to provide a list of assets that are raw materials, goods, including goods in stock and in use, supporting documents. the source of raw materials and goods in use.

For group of intangible assets:

First: For intangible assets that are intellectual property rights: The Seller needs to provide certificates, protection titles of the property being intellectual property rights or information, documents proving ownership. Ownership and use of intangible assets are the enterprises intellectual property rights and legal documents related to registration of intellectual property rights.

Second: For other intangible assets: The seller needs to provide a list of the companys key employees and employees, a list of customers and partners that the business is providing services and performing activities. trading with some other related documents.

+ Conducting appraisal:

After receiving documents and information about the property provided by the seller, the buyer conducts a legal examination of these documents and information to clarify the following issues:
First, the property ownership of the seller or the enterprise, including: The object of ownership to use the property; Scope of property ownership and use rights; Term of ownership and use of property;
Second, whether the obligations of the owner or user of the property have been fulfilled by the seller, or by the business;
Third, disputes, relationships with third parties for the exercise of ownership / use of property;

Fourth, the possibility of successfully transferring these assets to the buyer.

Issues to note when evaluating property:

Depending on the business sector of the business and the buyers goals, the asset appraisal and the objective of asset appraisal will be different in each case. Therefore, the list of assets to be assessed and how to perform asset appraisal in each case is different.
In addition to the appraisal of legal validity, the asset appraisal also requires appraisal in the financial aspect. Asset value must be faithfully shown in the accounting books and financial documents of the enterprise. Therefore, the seller should pay attention to the appropriate coordination with the group of people in charge of financial appraisal of the buyer for the assets to be appraised.
Asset appraisal requires the Buyer to apply many different legal provisions in different fields to consider the legal value of the assets to be assessed, thereby determining the legal value of the assets and risks. risk as well as the ability to successfully transfer the asset to the buyer.