How to sell a vintage dormant company

[Nick W UK]

Any advice please on the best place to sell a vintage dormant company that has no trading history? The company was incorporate in 2003 so it's 16 years old. I've seen a broker valuing 15 year old dormant companies at £8,800. I'm unlikely to get such a price from a broker since they have to make a markup profit, but are there buyers looking for such a company?

I could advertise on Ebay or Gumtree, are there any other suitable online market places?

 

[Mr D]

I'd suggest £0.
Is it worth anything due to clever name perhaps?
Age does not appear to matter for companies like it does for cars.

 

[alan1302]

I'd suggest £0.
Is it worth anything due to clever name perhaps?
Age does not appear to matter for companies like it does for cars.

Most old cars are worth less than when they were new though...

 

[Newchodge]

What, exactly, would you be selling?

 

[Mr D]

Most old cars are worth less than when they were new though...

There however is value to collectors in a great looking old car.
Not sure the company is seen the same way.

 

[DavidWH]

Most old cars are worth less than when they were new though...

Probably not, but worth more than what they were purchased for. ;-)

 

[WaveJumper]

More to the point who wants to buy a dormant company, just set up your own, unless perhaps as mentioned above it's got some tricked out name, is there really a market for these.

 

[BusterBloodvessel]

I wish I'd registered 150 companies 16 years ago and done literally nothing with them. Apparently I'd be a millionaire today.

 

[tan_lan]

The company has value because it allows whats essentially a new endeavour to meet the requirements of clients and suppliers, and appear established.

As example, a brand new company can not

1. Get a Apple developer account for around 2 months (as they require a duns number which takes a few week, and they only update their feed every month).

2. Groupon/Living Social wont deal with any business less than 6 months old.

And probably 100 other scenarios where off the shelf makes sense.

As to £8k, I doubt it. I have seen companies with 7 years histories going for £500 to £800.

 

[Mr D]

The company has value because it allows whats essentially a new endeavour to meet the requirements of clients and suppliers, and appear established.

As example, a brand new company can not

1. Get a Apple developer account for around 2 months (as they require a duns number which takes a few week, and they only update their feed every month).

2. Groupon/Living Social wont deal with any business less than 6 months old.

And probably 100 other scenarios where off the shelf makes sense.

As to £8k, I doubt it. I have seen companies with 7 years histories going for £500 to £800.

It will appear to have been dormant some time?

What is the benefit to a business buying your company over buying a fresh company for a few quid from companies house with their own choice of name?

 

[tan_lan]

The day after you purchase it you can file 12 months accounts. Hence a year of valid history.

You cant do that if you formed it the day before.

You wont get a duns number on day 1.

And the other things I mentioned.

 

[Mr D]

The day after you purchase it you can file 12 months accounts. Hence a year of valid history.

You cant do that if you formed it the day before.

You wont get a duns number on day 1.

And the other things I mentioned.

So the day after purchase you can spend money to file 12 months accounts showing …. what?

If you are convinced the company is worth something then should be easy enough finding someone to buy it.
Unless you are overestimating demand and benefits.

 

[tan_lan]

Mr D,

You could lend the company £1, then file micro entity accounts. It will then appear as an active company with 12 months accounts.

You are confusing me the the OP, I am not trying to sell a dormant company, I am simply pointing out reasons exist, as I previously posted.

 

[WaveJumper]

Well when I am doing business with any company and check their accounts I would be looking at more than one year's worth of filings. And if a company records showed it had been dormant for a number of years I would be very suspicious.

 

[obscure]

Mr D,

You could lend the company £1, then file micro entity accounts. It will then appear as an active company with 12 months accounts.

.... that show it is in debt to the tune of £1 and has earned absolutely nothing.... Surely the purpose of checking accounts is to establish if a company is a viable trading partner.... which clearly this isn't.

 

[Mark T Jones]

Perhaps I’m being naive, but I think most people would look at active reading, not just existence.

 

[tan_lan]

I think in order to avoid over confidence in a companies age, looking at change ownership of shares and new directors as the obvious indicators.

Micro entity accounts are not going to show anything useful.

A dormant company may of filed micro/abbreviated accounts for its entire existence, even though it was in essence dormant.

 

[Clinton]

OP, try contacting @scdirect

 

[Root 66 Woodshop]

Perhaps I'm being a bit numb here... but WTF?

@tan_lan - what you've said, to me looks bogus and personally I'd stay away from any company that provided false accounting.

We only ever deal with companies that can provide valid trading history... their accounts mean squat to us TBH... but if it looked as dodgy as you've said it can be... nah, sod that... we'd walk away... a company that had been formed for 16 years, yet only just filed their first year accounts? really... it doesn't scream anything odd to you?

 

[Maxwell83]

There is a market for aged dormant companies - just because the posters here don't want/need one, it doesn't mean people are not buying them. Brokers do a decent trade in aged dormants, with the price increasing for every additional year of age.

The OP isn't buying one so it doesn't really matter that a 16 yr old company with no trading history looks dodgy to anyone with sense. He's selling one, so all that matters is that people out there want them for one reason or another.

As Clinton suggested, SCdirect are one place to contact. Also try Coddan.

 

[tan_lan]

@root_66,

You may quite rightly look at an old company with no old accounts, having new directors and shareholders, and treat it the same as a company formed the day before.

But many people do not, and many companies "sales people" only care that the box is ticked, like Livingsocial/Groupon, if your not 6 months old they wont list a deal.

Setting aide the accounts issues, which I agree is a bit dodgy, I joined this thread as people were refusing to see any value or use in an aged company, but clearly reasons exist.

Not £8k's worth though

 

[Root 66 Woodshop]

50p is my best offer

 

[Nick W UK]

Many thanks for your thoughts, particularly to @tan_lan @Clinton and @Maxwell83 for your helpful information. The main benefit I could see in someone buying a vintage company was that one might use the strapline 'Incorporated in 2003', but I agree that would look missleading when under scrutiny it's found not to have been trading since that date. I also agee that a value of £8K is probably unlikely. Interesting to know the other benefits when applying for accounts with the likes of Groupon etc.

 

[TheoNe]

My advice would be to create an advert on a website like eBay or contact a service provider like Coddan who list dormant companies for sale.

 

[OhhEnnEmm]

I didn't think a dormant company with no trading history would have any value? Interesting though... Is it just a really well branded venture?

 

[The Byre]

OP, try contacting @scdirect

https://beta.companieshouse.gov.uk/company/SC507226/filing-history

Ouch!

 

[Nick W UK]

... Is it just a really well branded venture?

No, but I'm told it would be worth significantly more if it came with a bank account.

 

[The Byre]

As you can see from my posting, a company's books and credit record is but a click away. I fail to see the purpose of buying old unused companies other than to cheat the unwary! If a company has a record like the one @Clinton suggested, we would not want to deal with them on any level.

 

[Clinton]

Good point. I do not know the scdirect guy, just remember him posting in UKBF some while ago about selling dormant companies. But it looks like his own company is in a bit of a mess. Well done to @The Byre for spotting that.

When people buy dormant companies it's usually for the purpose of fooling someone into believing they've been operating for longer than they actually have. That's in the low end of the market. At the other end, with listed companies, reversing into shells is quite normal and considered completely acceptable!