Money

When an entrepreneur decides to start a business, different options are available to them to finance and execute his project. These are goodwill and key money. Often, these two notions are confused. Discover their differences in this article. The goodwill A goodwill can be defined as a set of tangible and intangible elements allowing a company to carry out its activity. In other words, the sign, the clientele, the premises, as well as all the equipment necessary for the activity of a company constitute a business. The leasehold rights are also part of it. It should be noted that the price of the purchase of a business is quite high because, in addition to acquiring the right to lease and the premises, there is also the acquisition of the clientele. It should be noted that a business can only exist under two conditions: it must have a clientele, and it must constitute commercial activity. Generally, a business is sold when a company wishes to be sold. Moreover, a business can be partially sold, i.e., only a part of the elements that constitute a business is sold. The seller must be registered in the Register of Commerce and Companies or in the Trade Register. The key money When selling a business premise, the buyer is obliged to pay a sum of money, in the form of additional rent or compensation, to the owner of the premises in addition to the rent already negotiated in the lease contract. This is the key money. It is a sum that attests to the right of entry into the premises. The key money is considered to be a rent supplement when its amount is accounted for in expenses. It is a sum that allows foreseeing the possible risks that the rental value of the area does not increase more rapidly than the rent. It is tax-deductible. The key money is considered as an indemnity when it is a counterpart to the commercial advantages provided by the former owner or when it is a depreciation of the premises. It is an intangible asset that cannot be amortized or deducted for tax purposes. Very rarely, key money can be considered in a mixed way, whether it is in both cases at the same time. The lessor can only demand the key money if the premises were unoccupied until then. Tax consequences For the business The transfer of a business involves tax obligations for both the transferor and the transferee. • For the transferor: he will have to tax the pre-tax profits to income tax or corporate tax, depending on the company, within 45 days. He must pay the VAT following the transfer of his business within 30 to 60 days. In addition, the transferor must pay the territorial economic contribution if the transfer took place during an accounting period. • For the transferee: he must pay registration fees to the tax department within one month of the transfer. He must also make a VAT declaration and payment to the tax authorities within 15 days. And he must pay the taxes not paid by the transferor. For the key money If it is an indemnity, the key money is not taxable to the lessor. And for the tenant, it is not deductible. However, if the key money represents a rent supplement, it is declared as property income for the lessor. It is, therefore, subject to VAT. But there is a possibility to spread it over a period of 4 years. The key money is deductible from the result on the basis of a percentage fixed on the duration for the tenant Sound off in the comments section and tell us if you want to read more about goodwill.
Money

How To Set and Achieve Your Financial Goals?

You may want to have many things or do many things. However, it is impossible to achieve all these things (at once). That’s why it’s helpful to set financial goals. By doing so, you will get a better idea about the most essential goals. This can be short-term (1 year) as well as a medium-term […]

life
Insurance Money

The Ridiculously Comprehensive Guide to Life Insurance

One thing in life is inevitable and is something that will happen to all of us here on Earth, and that thing is death. Death is the one thing that all of us, rich or poor, are sure will happen in life, and it is the finite end of one’s life and journey. This is […]

Budget Money

How To Start Saving Money?

Saving extra money is desirable for everyone. You don’t need to live a minimalist lifestyle to save money. By using your money wisely, you can do many things and still keep saving money. Whether it’s saving up for a nice trip, renovating your house, or waiting a while for the perfect bag. It’s always necessary […]

stocks
Investment Business Money Wealth

Why Should You Invest in Stocks?

Not all of us know a lot about stocks and what it means to invest in them. For any layperson, when you talk about stock and the stock market, I think about Martin Scorsese’s The Wolf of Wall Street. Let’s be honest for a second; I have a masters in linguistic and English lit; this […]

money
Money

How To Save Money While Shopping Online? (Part 2)

With the advent of this pandemic, more and more people prefer to shop online because they fear being exposed to the virus when shopping in person. In the first part of this blog series, we talk about some of the ways with which you could save money while shopping online. In this specific part, we’ll […]

money
Accounts Budgeting Money

How To Save Money While Shopping Online? (Part 1)

With the advent of this pandemic, more and more people prefer to do their shopping online because they fear being exposed to the virus when shopping in person. Online shopping is great, and all but you can spend a lot of money without realizing it, and let’s not forget the cost of shipping or delivery, […]

money
Budgeting Budget Money

Save Money On A Tight Budget

It may seem impossible to save money when you’re on a tight budget. However, conserving money while you’re short on cash may not be as difficult as you think. Small lifestyle changes can make a big difference. So, if you’re on a tight budget and looking for methods to save money, know that it’s a […]

season
Budget Accounts Budgeting Money Wealth

How to Not Overspend During This Holiday Season

December is the most significant gift-giving season, and it is the time of year when most of us spend a lot of money on gifts, alcohol, clothes, electronics, and even food. According to a recent study conducted by Gallup, the average American plans to spend an average of 830 dollars this holiday season. And this […]

Salary Advance Loan
Budget Budgeting Loans Money

Salary Advance Loan; Everything You Need To Know (Part 2)

If you haven’t gotten your paycheck yet, and don’t want to tap into your savings, why not consider a salary advance? What Is A Salary Advance Loan?  A salary advance is a loan that you take out against your next paycheck. Salary advances, like other loans, include a payback schedule, interest charges, and additional fees. […]

Scroll to Top