New business start up

[irap]

Hi
I need some legal advise, I am planning to buy a business with two employees, its a retail shop run by staff only, I wont be needing them as I will be fully involved in the business, the seller says that I have to take their liability as he cannot sack them, do I have to employ them, can I say them no, is there any way seller can get rid of them (seller is retired and is not involved in day to day running of shop all is done by staff). Both the staff have been working for nearly two years

Please advise

 

[Bill Ryan]

You will be caught by the TUPE regs. Have a look here on here - Business Link for some basic info

After you have the basics in your head you might have some specific questions to ask. It can be a difficult area of employment law.

 

[The Resolver]

As the business is a single retail shop that will be effectively no more than an income for yourself, and assuming the customer base is casual and will continue simply by the position of the shop and the nature of its sale stock even if there is a change of name, then there seems little point in buying the business rather than just an asset purchase. You would, in the latter case, contract to take over the premises (by either purchase of freehold or assignment of lease) and buy the stock and fittings and no more. In this way you will have no liability for the employees. There may be a tax impact variation so take accountancy advice. Of course the seller may not like the idea of retaining a redundancy liability for the staff but then , if he does want you to take them over, and will not agree to an asset sale, you can negotiate a reduction in price to allow for this liability.

 

[irap]

Dear Mr Ross,

Thank you for your advise, is it possible that the current seller can make the staff redundant and then sell the business to us. As we are buying the business leasehold does it mean that if we want we don't want to take the liability of the employees we can do that.
please advise

Thanks

 

[The Resolver]

Dear Mr Ross,

Thank you for your advise, is it possible that the current seller can make the staff redundant and then sell the business to us. As we are buying the business leasehold does it mean that if we want we don't want to take the liability of the employees we can do that.
please advise

Thanks

Yes to the first question. If by 'buying the business leashold' you mean you are just buying the right to occupy the shop then this is not buying the business and thus you would not be liable for the employees. However I am making assumptions on what you are saying and you really need to take advice from someone who sees the documentation.