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Damien Bosco
Damien Bosco, Attorney
Category: Business Law
Satisfied Customers: 2387
Experience:  Helping you with your legal questions.
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Hi Damien! We are planning to buy an existing dominos pizza

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Hi Damien!
We are planning to buy an existing dominos pizza store. Are there any taxes involved in this buying transaction? Is it a percent of the selling price, fixed amount? Does it have to be paid immediately?

Please advice,
Thanks

Hi and Welcome! My name is XXXXX XXXXX will be assisting you. I am happy to help you. Are you buying the assets or the stock? Meaning, is this an asset purchase through an asset purchase agreement; or a stock purchase through a stock purchase agreement? Let me know, because of the possible difference in tax implications. Regards, Damien

Customer: replied 4 years ago.

Not sure how this is usually carried out. it is a store that is underperforming , sell price is below average, pretty much we;re buying the store for equipment price and a bit more. a store value usually is 3x ebitda per year. this store is losing money so i'm not sure.

German: From the facts you are providing, it sounds like you will be purchasing the assets

Generally, buying a business's hard assets such as equipment and machinery will result in local and state sales and use tax liabilities for the buyer or the seller, depending on how the assets are valued. When assets carry a high value, the tax implications for the buyer are reduced, since the buyer can take a large tax deduction on the asset's depreciation. However, a seller will attempt to lower the value of the business's tangible assets in order to reduce tax liabilities on any assets sold for more than their depreciated cash value. The business buyer and seller must negotiate a fair price on tangible assets to reduce the tax implications for both parties.

If by chance, you are purchasing a Domino's franchise, this link provide information on it and other information about Domino's stores:

http://www.franchisedirect.com/foodfranchises/dominos-pizza-franchise-07460/ufoc/

I hope this helps you. Regards, Damien
Damien Bosco and 6 other Business Law Specialists are ready to help you
Hi German ,

I'm just following up with you to see how everything is going. Was my answer helpful? If so, please provide a positive rating (a smiley face or 3 to 5 stars).

Thank you,

Damien Bosco