Advice pls- taking over another company

[midnight_caller2002]

Hi guys hope you can help...

Ok we are a small ltd company. Recently we got the chance to takeover a smaller company that is currently run by a sole trader. We have agreed a sum (£) and payment terms as well as what is actually being provided in the deal.

My questions are : Other than receipting where i put this money and of course recording details of all new assets what else should i be doing to ensure this all goes smoothly.

Dont want to get bit in the bum... I am sure everything is fine, i personally know the guy selling and his reasons for it but always woorth thinking of this as if it were a stranger right?

[Bri]

Yup always treat business and friendship differently. As for the rights & wrongs I'd be wrongly qualified to comment although I have fair idea

[dimitri1]

Hi
although you don't mention type of assets taken over, the following general matters would need to be considered:
The assets have to valued at fair values, including any plant & equipment and goodwill. The latter should be valued in accordance with generally acceptable valuation principles. Companies can obtain tax relief for goodwill acquired over a number of years. Also, the higher the value of plant & machinery the higher the tax relief because of future capital allowances.
Is there a building purchased? If yes, you may benefit from tax relief on fixtures expenditure on the building, for which capital allowances have either not fully been claimed or not claimed at all. This is a complex area with special valuation rules.
Finance: If you borrow personally money to purchase the business, you can claim loan interest relief against your personal income.
Employees: any existing employees must be transferred to your company if you buy the other business as a going concern.
VAT: If the acquired business was registered for VAT, the new owner inherits the turnover of the previous business and is liable to register immediately.
The above is only general guidance and I am not even sure if it applies to you as you don't specify the circumstances and how you structure the acquisition but I hope it helps.
Demetris Savva
Constantine Savva, Chartered Certified Accountants
Free Weekly Tax Tips for small businesses