Many find the idea of starting a business appealing, but lose their motivation after dealing with business plans, investors, and legal issues associated with new start-ups. For those disheartened by such risky undertakings, buying an existing business is often a simpler and safer alternative.

Advantages

The main reason to buy an existing business is the drastic reduction in start-up costs of time, money, and energy. In addition, cash flow may start immediately thanks to existing inventory and receivables. Other benefits include preexisting customer goodwill and easier financing opportunities, if the business has a positive track record.

Disadvantages

The biggest block to buying a business outright is the initial purchasing cost. As the business concept, customer base, brands, and other fundamental work have already been done, the financial costs of acquiring an existing business is usually greater then starting one from nothing. Other possible disadvantages include hidden problems associated with the business and receivables that are valued at the time of purchase, but later turn out to be non-collectable. Good research is the key to avoiding these problems.

Franchise businesses are very suitable for the E2 visa and enjoy a number of advantages. One of the top concerns of visa officers in deciding an E2 application is what is the likelihood of success of the applicant’s business. Franchise businesses are generally viewed more favorably by immigration authorities, because they are successful business models with highly developed, tried and true systems. Investing in a franchise business also allows foreign entrepreneurs to present professionally prepared operations manuals, marketing, and training materials in their E2 visa applications.

Another key advantage of franchise investment applies to people who lack significant business education or experience. Most visa officers consider franchise training and on-going support to be highly relevant and valuable preparation, and are often satisfied with the applicant’s readiness for entrepreneurship, even if the person has little to no business background. For these reasons, franchise investment is very well suited for E2 visa investment.

For a listing of E2 visa friendly franchisors and professional assistance with finding a suitable franchise investment opportunity, please visit: www.franchise.city

A franchise is a legal and commercial relationship between the owner of a trademark, service mark, trade name, or advertising symbol and an individual or group wishing to use that identification in a business. The franchise governs the method of conducting business between the two parties. Generally, a franchisee sells goods or services supplied by the franchiser or that meet the franchiser’s quality standards.

Franchising is based on mutual trust between the franchiser and franchisee. The franchiser provides the business expertise (marketing plans, management guidance, financing assistance, site location, training, etc.) that otherwise would not be available to the franchisee. The franchisee brings the entrepreneurial spirit and drive necessary to make the franchise a success.

There are primarily two forms of franchising:

1. Product or trade name franchising; and

2. Business format franchising.

In the simplest form, a franchiser owns the right to the name or trademark and sells that right to a franchisee. This is known as product/trade name franchising. The more complex form, business format franchising, involves a broader ongoing relationship between the two parties. Business format franchises often provide a full range of services, including site selection, training, product supply, marketing plans, and even assistance in obtaining financing.

Please note that our firm does not endorse any franchises. You should exercise due diligence before buying a franchise and consult an experienced E2 visa lawyer to evaluate whether the franchise business you are interested in qualifies for the E2 investor visa.

Registering a Company: Choosing a Business Structure

Forms of Business Ownership

One of the first decisions that you will have to make as a business owner is how the company should be structured. Below are the most common forms of business structure:

1. Sole Proprietorships
2. Partnerships
3. Corporations
4. S-Corporation
5. Limited Liability Company (LLC)

Purchase Agreement

The purchase agreement is the key document in buying the business assets or stock of a corporation. It is important to make sure the agreement is accurate and contains all the terms of the purchase. It would be a good idea to have a business law attorney review this document. It is in this agreement that you should define everything that you intend to purchase of the business, assets, customer lists, intellectual property, and goodwill.

The following is a checklist of items that should be addressed in the agreement:

• Names of Seller, Buyer, and Business
• Background information
• Assets being sold
• Purchase price and Allocation of Assets
• Covenant Not to Compete
• Any adjustments to be made
• The Terms of the Agreement and payment terms
• List of inventory included in the sale
• Compliance with the Bulk Sales laws of the state
• Any representation and warranties of the seller
• Any representation and warranties of the buyer
• Determination as to the access to any business information
• Determination as to the running of the business prior to closing
• Contingencies
• Possibilities of having the seller continue as a consultant
• Fees, including brokers fees
• Date of closing

Getting Business Licenses and Permits

STATE REQUIREMENTS

While business licensing requirements vary from state to state, some of the more common types are listed below.

Business Licenses

A state business license is the main document required for tax purposes and conducting other basic business functions. Many states have established small business assistance agencies to help small businesses comply with state requirements.

Occupations and Professions

State licenses are frequently required for occupations as varied as building contractors, physicians, appraisers, accountants, barbers, real estate agents, auctioneers, private investigators, private security guards, funeral directors, bill collectors, and cosmetologists. Since you can’t always guess which occupations and professions are licensed by your state, you should always check with your state licensing authorities.

Licenses Based on Products Sold

Some state licensing requirements are based on the product sold. For example, most states require special licenses to sell liquor, lottery tickets, gasoline, or firearms. Contact your state licensing authorities to determine the licensing requirements of your business.

Tax Registration

If the state in which you operate has a state income tax, you’ll have to register and obtain an employer identification number from your state Department of Revenue or Treasury Department. If you’re engaging in retail sales, you will need to obtain a sales tax license.

Trade Name Registration

If your business will only be operated in your local community, registering your company name with the state may be sufficient.

Employer Registrations

If you have any employees, you’ll probably be required to make unemployment insurance contributions. For more information, contact your state Department of Revenue or Department of Labor.

FEDERAL REQUIREMENTS

Employer Identification Number (EIN). With the exception of sole proprietors, most business types must apply for an EIN regardless of whether they have employees.

Licenses and Permits

Most businesses do not require a federal license or permit. However, if you are engaged in one of the following activities, you should contact the responsible federal agency to determine the requirements for doing business:

• Investment Advising
• Drug Manufacturing
• Preparation of Meat Products
• Broadcasting
• Ground Transportation
• Selling Alcohol, Tobacco, or Firearms

Federal registration of intellectual property, including patents, trademarks, trade names, and copyrights, provide business owners with exclusive use of intellectual property in the US as well as in a large number of foreign countries.