- Original Poster
- #1
Hi,
Just after some general idea's from the collective so i can start to look at various options. Obviously won't be doing anything without speaking to an accountant and/or tax advisor but would prefer to go in with some understanding and maybe preferred options.
I currently own two businesses ( both within the IT sector ) along with my business partner. An equal 50 / 50 split on both.
Both business have a decent level of cash at bank, one is circa 600k, the other is circa 800k. Mid range goal ( within 1 to 2 years ) is to sell both and retire.
We are looking to merge both business together as we already share a lot of services, office etc and when both are combined any miltiplier we use when we do come to sell everything would be much higher than each company individually. To make use of the current Asset Business Relief we are thinking of selling one ( all or part ) to the other. Company A has around 600k in cash at bank, owned 50 / 50 by myself and my Business partner but the share structure doesn't incl our Spouses. However this company would have a better singular value as its primarily IT Support and Security services. Company B has around 800k in cash at bank, owned 50 / 50 again but this company also has C & D shares for our spouses which are over 10% and they could also make use of Asset Business releif.
Doesn't really matter which one buys which but our preference would be A buys B as A has been trading longer and would have a better valuer in the current market and generally works with 12 month contracts. Company B has less staff but higher margins. It also has contracts in place ranging from 12, 36 and 60 months.
So moving onto how a possible sale would work, say we want to pull £1.2 M as a cash purchase, this would equate to around 1/3 of the value of Company A but around 50% of Company B ( they have been recently valued by a independent firm ) although we would be happy for that to equate to 100% purchase as we still own both companies. If cash reserves are combined we have the cash to do this and I presume one company can lend the other its cash to do that but i'd be keen to know if there is some way to maybe paying part in cash and borrow the rest, preferably as a secured loan against the company itself as we would like to use some of the balance of cash to invest into the companies for additional Staff / marketing etc.
Can anyone let me know what options could be avalible please.
Just after some general idea's from the collective so i can start to look at various options. Obviously won't be doing anything without speaking to an accountant and/or tax advisor but would prefer to go in with some understanding and maybe preferred options.
I currently own two businesses ( both within the IT sector ) along with my business partner. An equal 50 / 50 split on both.
Both business have a decent level of cash at bank, one is circa 600k, the other is circa 800k. Mid range goal ( within 1 to 2 years ) is to sell both and retire.
We are looking to merge both business together as we already share a lot of services, office etc and when both are combined any miltiplier we use when we do come to sell everything would be much higher than each company individually. To make use of the current Asset Business Relief we are thinking of selling one ( all or part ) to the other. Company A has around 600k in cash at bank, owned 50 / 50 by myself and my Business partner but the share structure doesn't incl our Spouses. However this company would have a better singular value as its primarily IT Support and Security services. Company B has around 800k in cash at bank, owned 50 / 50 again but this company also has C & D shares for our spouses which are over 10% and they could also make use of Asset Business releif.
Doesn't really matter which one buys which but our preference would be A buys B as A has been trading longer and would have a better valuer in the current market and generally works with 12 month contracts. Company B has less staff but higher margins. It also has contracts in place ranging from 12, 36 and 60 months.
So moving onto how a possible sale would work, say we want to pull £1.2 M as a cash purchase, this would equate to around 1/3 of the value of Company A but around 50% of Company B ( they have been recently valued by a independent firm ) although we would be happy for that to equate to 100% purchase as we still own both companies. If cash reserves are combined we have the cash to do this and I presume one company can lend the other its cash to do that but i'd be keen to know if there is some way to maybe paying part in cash and borrow the rest, preferably as a secured loan against the company itself as we would like to use some of the balance of cash to invest into the companies for additional Staff / marketing etc.
Can anyone let me know what options could be avalible please.
