With the successful advice of dozens acquisitions projects in 2015, VIETTHINK was noted spectacular imprint in M & A property and became the pioneered firm of this field in Vietnam .
M & A Property is not a new concept, but in Vietnam this concept is still unfamiliar to many people. Understanded a simple way, M & A Real Estate is the concept refering to acquisitions and mergers in the real estate sector, which aim to capture the potential projects.
In the heyday when the trend of "home made real estate a" rose, all businesses compete with each other and each owns some real estate projects. There are a considerable number of successful businesses and also booming businesses, but many businesses are turn up side down when spending all the money on the projects and then got an empty land with local bank debt. But in the economy market, the failure of this people is opportunity for others. Phase of gloomy real estate market is a real opportunity for potential businesses to acquirer of new potential real estate projects with the cheapest price.
All types of M & A Project?
Like experiences in "operating" projects, M & A real estate activity also takes place multifoldly. With projects which had enough legal condition to transfer, the simplest M&A way to tranfer is naming the investor directly to purchasers. But that kind of project is not many, most of the projects are unfinished on the legal procedures and not eligible to transfer, some are even in the process of clearance. Therefore, the common way now is acquiring the project through the acquisition of shares of the business owner. But there is one fact that every businesses often have several projects, while the buyers do not wish to acquire all of the projects as well as receive whole business for fear of risks. In this case, both sellers and buyers are confused do not know what they should do. The most effectivest way is to invite professional consultants to advise and assist the parties to implement M & A projects.
Steps in an M & A business
From practical advice to clients in company law VIETTHINK, we generalize the steps taken to an M & A deals in the real estate as follows:
- Step 1: Verify the project file (Due diligence)
Like all conventional M & A, first job is to appraise the case file. However, for M & A property, the job does not stop at finding out records that are available, which in most cases counsel must assist clients complete the records and procedure legal unfinished project. In other words, the sellers have to be helped in "cleaning" the project file. This is hard work, requiring the consultant both knowledge of the law and practical experience of the project to be able to detect and handle outstanding issues of records and procedures legal projects in accordance with the provisions of law.
- Step 2: Conduct division, splitting business
This step is often applied in cases when an enterprise owns many projects but the buyers just want to take over a project. Thus, the investor now has to be split into many small businesses to each small business owner a separate project. This is the most difficult time for counsel. The first difficulty is to make the tax settlement procedures for determining the financial obligations of the business remaining separated, and must determine the obligations with creditors and other third parties. Next are considering the valuation of enterprise mergers and asseting the valuation separated components (projects) to registered charter capital of new business mergers. Typically, the value of this property is gathered from the cost of the project concerned to the procedure and cost of clearance. But in fact, these costs are often not fully reflect the evidence so that it is difficult to be recognized the company's capital is split. The problem is how to be able to record up to the cost of the project which the investors spend money on the value of the charter capital of the separated businesses so that both sellers and buyers are not disadvantaged.
- Step 3: Transfer of shares
After completing the mergers and business registration for new businesses to be split, the parties will carry out the transfer of shares in the company, split to each other for the purchaser to own the entire company and thereby may acquire the project. At this point there is a problem rising, which is that if the new company is registered businesses, the founding shareholders can not freely transfer their contributions to third parties. Therefore, a technical action is necessary to take the buyer's project involved the founding shareholders of the company to be split immediately while splitting to avoid this limitation prescribed by law.
- Step 4: Registration adjusting investment certificate project
As the project moved into a new business, it should be separated proceeding change of investment certificates in recognition of newly separated business as the new investor of the project. This work is only a formality but sometimes it face to many difficulties due to the new business name splitted does not coincide with the business name granted an investment certificate. In addition, new businesses often do not have the financial resources and experience in the investment project so the competent authorities often consider very carefully before granting investment certificates adjusted. There are also the type of subsidiary license, the written agreement and approval-related projects which must be adjusted to the new owner's name.
Instead of a conclusion
To successfully consulted a M & A real estate requires counsel meet all the legal knowledge intensive real estate and real experiences about the project, and must have oral communication skills part. Otherwise it will be difficult to succeed.
With a team of lawyers with professional knowledge and long experience in the field of consultancy projects in real estate, VIETTHINK is confident that we will advise customers with feasible and effective solutions to succedd in implementation of the Trade M & A property in the shortest possible time with the most reasonable cost. VIETTHINK always proud to accompany businesses contribute to the prosperous development of the country. /.
Dau Quoc Dung Lawyer - VIETTHINK Law Firm