I am trying to understand the process involved in buying and selling a business and whether it is worth being gst registered.
I am trying to understand it best from the buyer and seller and then from from the buyers perspective when they try and sell again in future.
To help me explain/understand this I have 4 simple different scenarios:
Which is the preference for the seller (registerd company B) ? receive 600K + GST from NRComp? Or 600K from RComp? Or does it make a difference for the seller?
Some Qs/observations on the different options:
I am trying to understand it best from the buyer and seller and then from from the buyers perspective when they try and sell again in future.
To help me explain/understand this I have 4 simple different scenarios:
- 1 - Registered Company A Buys Registered Company B for 600K, zero-rated and no gst is exchanged, then if A sells (sometime Later) for 1M to Registered Company C for 1M, zero rated so profit is 400K for company A??
- 1A - Registered Company A Buys Registered Company B for 600K, zero-rated and no gst is exchanged, then if A sells (sometime Later) for 1M to Non Registered Company C for 1M, Does C pay 1M+gst and A can claim back gst??
- 2 - Non Registered Company A Buys Registered Company B for 600K, plus gst of 15% 690K, then if A sells (sometime Later) for 1M to Registered Company C for 1M, zero rated? so profit is 310K??
- 2A - Non Registered Company A Buys Registered Company B for 600K, plus gst of 15% 690K, then if A sells (sometime Later) for 1M Non Registered Company C for 1M, zero rated? so profit is 310K??
Which is the preference for the seller (registerd company B) ? receive 600K + GST from NRComp? Or 600K from RComp? Or does it make a difference for the seller?
Some Qs/observations on the different options:
- 1 - seems pretty straight forward as everything is kept in the gst net, but it seems to get complicated when it comes outside the gst net?
- 1A - does it make a difference to A when it goes to resell to non registerd company C , compared with option1
- 2 - the theory here is that compA pays the gst up front and then when it goes to sell it does not include gst so the profit is entirely compAs.
- 2A - same as option2 but selling to a NRCompC, what is the difference in the outcome for NRCompA with option 2
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