Taking over a business is a viable alternative to starting one from scratch. On average, transferred businesses have a higher success rate and create more employment than start-ups.
Irish Competition Law is enforced by the Competition Authority. Mergers and acquisitions of businesses with a turnover above certain thresholds must be notified to the Authority.
Some exceptions to these general rules apply, including mergers and acquisitions of media organisations which must be notified to the Authority irrespective of the turnover of the organisations involved and some mergers and acquisitions involving banks which should be notified to the Minister of Finance, rather than to the Authority. Mergers and acquisitions involving media businesses must also be approved by the Minister for Jobs, Enterprise and Innovation.
There is also a provision for Voluntary notification for mergers and acquisitions that do not meet the financial thresholds but have the potential to substantially lessen competition in the State.
Reducing the tax burden
Where inheritance tax is concerned, Ireland offers a reduced taxable base provided that the activity of the transferred business continues for several years.
Tax exemptions also exist (up to a certain threshold) in Ireland for business transfer sales to third parties. This means that, when a profit is made on the sale of a business, the risk of an excessive level of personal income tax is avoided.
The VAT Act covers transfers of ownership of goods in the course of a business transfer between two taxable persons.
Ireland has adopted a number of EU laws regulating takeover bids and designed to facilitate cross-border restructuring and enhance minority shareholder protection.
The Irish Takeover Panel is responsible for ensuring that takeovers (including takeover bids) and other relevant transactions in relevant companies comply with the law.
Ireland has already implemented a number of EU recommendations supporting business transfers in the areas of tax neutral restructuring, simplification for small enterprises and PLCs, reduced inheritance tax, deferred inheritance tax and retirement tax relief.
The status of any employees affected by a transfer of ownership is governed by Irish legislation from 2003 and 2006 which implemented EU legislation from 2001. Under the relevant legislation, the transfer of ownership shall not in itself constitute grounds for dismissal. The legislation itself does not however prohibit dismissals for economic, technical or organisational reasons which may entail changes in the workforce.
When a business or part of a business is taken over by another employer as a result of a merger or transfer, the new employer is required to take on any existing staff. The employee is entitled to continue under the same terms and conditions of employment with the new employer.
Retiring business owners need to plan the transfer of their business in advance.
Some standard requirements to be completed when taking over a business are the same as when setting up a new business.
The Companies Registration Office (CRO) is responsible for incorporating companies and registering business names.
Changes to a company's type, name, address or Director/Secretary details are also submitted to the CRO. A number of CRO forms can be filed electronically.
Registration and re-registration of companies is dealt with in the Companies (Amendment) Act 1983.
Registration for tax and Pay Related Social Insurance (PRSI) is done through the Revenue service.
The transfer of a business which is VAT registered, may be eligible for relief from VAT, provided the buyer is registered for VAT and intends to continue to use the assets purchased for a business purpose. Registration for VAT is handled by the Revenue service.
Enterprise Ireland is the government agency responsible for developing and promoting Ireland's business sector. Its mission is to accelerate the development of world-class Irish companies to achieve strong positions in global markets.
The Business Access to State Information and Services (BASIS) website was created in 2000 as part of the Irish Government Action Plan Implementing the Information Society in Ireland. Its aim is to deliver government information and services to business 24 hours a day, seven days a week.
The 2007-2012 Seed and Venture Capital Programme was launched to improve access to finance for SMEs. Enterprise Ireland is investing €175 million under this programme.