ltd co. bank a/c takeover

[jp_1]

Q: When acquiring a ltd co. do you take over the company's bank a/c? My bank will not allow me to do so as it contravenes data protection. As there are standing orders and direct debits going into this a/c it could mean that I could potentially lose some of the business transferring s/o and d/d from one a/c to another. Also if I do open a new a/c how do I ensure the other party has not left their old a/c open racking up debts under the company's name?

Appreciate some advice

 

[elaine@cheapaccounting]

depends on the agreement of sale of the business

 

[MyAccountantOnline]

Q: When acquiring a ltd co. do you take over the company's bank a/c?

Its not generally advisable but as Elaines has said it will depend on the terms of the business sale.

how do I ensure the other party has not left their old a/c open racking up debts under the company's name?

Its one of the really important reasons why it is essential, in my opinion, to get professional advice when buying any business. Their really are many aspects to consider, this is just one of them.

 

[bovine]

you can take it over, go in with the signatory and process it. Its quite straightforward.

 

[jp_1]

Hi Bovine. I've heard about doing this but i'm not sure if I want the other party to have access to the a/c as well. As I understand it we can add ourselves as signatories and then the the other party resign as signatories after 3 months. I just feel uncomfortable with the potential access the other party has to the a/c.

Hi Nicola thank you for your comments. I have taken lots of advice from both solictors and accountants. Both advise setting up a new a/c.

 

[elaine@cheapaccounting]

If you take on the existing account think about how you would know what cheques / future commitments etc have been written on that account.#

IMO - new account is a must

 

[jim_price]

If you're acquiring the company's share capital then the assets/liabilities come with it, including bank accounts.

If the conduct of the bank account prior to completion concerns you, then get it covered by some due diligence.

There should be no question whatsoever of the previous owners remaining as signatories post completion, unless you have an arrangement for them to stay on in management roles.

 

[jp_1]

Thank you for your replies guys. It is appreciated.