The auction is a way of public sale of company’s property. The owner must decide on the implementation. Based on our practice, the auction has proved its effectiveness as the most accessible and transparent mechanism for selling unused or inefficiently used property. The price of the transaction determined during the auction (conducted in accordance with the legislation) is the market price for the goods for tax purposes. It should be remembered that an auction conducted in violation of the rules may be declared invalid by the court. And this means that the contract concluded with the winner of the auction will also not be valid.
Rule one: Correctly determine the value of the subject of the auction
The sale price of the property should be formed on the basis of the current market analysis, therefore it is recommended to make an independent evaluation before selling. The market value of the property, the certified appraiser formed, allows the owner of the property, regardless of the form of ownership, to form the “correct” initial price of the subject of the auction. We need to draw attention to the fact that the “real prices” of transactions sometimes differ significantly from the “bid prices” on different thematic Internet resources, since many of them are formed on the basis of the seller’s “optimistic” wishes and do not always coincide with reality. If you want to consult about the sale price of your dream property, getting help from Hudson & Marshall is a good idea.
Rule two: Preliminary legal analysis of the transaction
- When conducting the auction, it is necessary to conduct an analysis of the seller’s legal documents: to find out whether there is a decision of the supervisory board (general meeting of participants) on the sale of the subject of the auction.
- It is necessary to analyze the circle of participants of the forthcoming tenders, determine who is entitled to participate in the auction, what documents should be provided to the participants. When bidding for foreign legal entities, it is necessary to request a legalized extract from the trade register of the country of registration of the participant.
- It is necessary to analyze the volume of pre-sale preparation of the subject of the auction. When selling a property, you need to carefully study the documentation issued by the state real estate registration authority, so as not to be later in an unpleasant situation.
- It is necessary to analyze the current purpose of the subject of the auction. As a rule, the object is sold exactly in the current assignment. If the seller sells the “boiler room” and actually calls it a “warehouse”, it is better to align the title documents and change the purpose of the building. To do this, the seller must perform a number of administrative procedures and arrange the proper documentation.
- It is necessary to analyze the current state of the engineering networks serving the subject of the auction. The seller for various reasons can’t always provide the necessary information, and in fact it is important for the buyer – with the proper operation of the networks related to the further development of business and maintenance of the purchased building as a whole.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.