How to sell a company to its members

[Robert Down]

Hi, I own (as a sole trader) an online portal that serves a big International industry sector. I've run it for 18 years and it's a useful marketing tool for the businesses that use it (currently for free as members), the site is funded by the google advertising that appears on it.

I'm looking for some advice on how to sell the portal and all its IP to my industry members, so that they as a consortium or co-operative own and run it as they wish for their mutual benefit and I am either out of the picture or remain for an agreed period as an advisory.

I've been thinking perhaps registering it as a Ltd company, with myself as sole shareholder and then offering those shares to the members on an equal basis.

There is some recent precedence in the estate agent sector with onthemarket. However I believe they have done it with Ltd by guarantee.

I guess it's similar to selling a company to its employees, except in my case they are members.

If anyone has any ideas or experience in how to construct or handle this sort of sale I'd be grateful to hear it.

Thank you very much for reading this and to anyone that comments.

 

[Scalloway]

A company limited by guarantee may be suitable. Do you plan to have members withdraw profits?

 

[Robert Down]

Hi, I don't plan to offer it as a profit maker in its own right (although it can be), the attraction for the member/owners would be in having a place that they control to market their own profit making businesses, any profit made by the portal would go back in for developement and expansion. This does fit the guarantee model.

But I have been reading up on the guarantee model and I can't see how I myself would be able to make a profitable exit from it (I'm not planning to give it away).

 

[Scalloway]

Initially I presume you plan to sell the business to the new company. As far as I am aware there is nothing to stop you being remunerated as a director of a company limited by guarantee. You could extract the profit as an exit bonus through PAYE.

 

[Gecko001]

Has the OP thought about forming a trade association?

 

[Chris Ashdown]

the first question would be does any member have the inclination to run the site, a group of members are at present presumably just looking for information of some sort not to spend time helping to run it

My guess would be you have to run it as a proper business able to make enough profit to be able to sell it to a individual be it part time or full time