Selling to a buyer without funds

[Keith@LFC]

New member here so please be gentle!

Long story short…

- Small used car sales Limited Business for sale.
- Assets roughly equal liabilities at present.
- No premises, no staff, I’m the sole director and shareholder
- Value of business is 6 years worth of accounts and very strong customer reviews.

An interested party has approached offering to buy the business by effectively taking on the liabilities and suggesting that I draw the cash from the business in way of a loan that he will then write off.

He says he hasn’t got access to funds to buy the company via conventional methods and his stated intention is to then secure investments in to the company and increase its operational level.

It’s an unusual proposal and I’m naturally cautious because of potential future liabilities. My question though is what would the prospective buyer have to gain??

 

[IanSuth]

How well do you know/trust the guy ?

I can see potential for your 6 years of good reviews to give them a fair amount of scamming time before the poor reviews catch up.

 

[WaveJumper]

The accountants here I am pretty sure will have a view on taking a loan and then having it written off, I am no expert in that field but why can't he get investors on board now if he's so sure about the future and then purchase the business from you.

 

[Keith@LFC]

How well do you know/trust the guy ?

I can see potential for your 6 years of good reviews to give them a fair amount of scamming time before the poor reviews catch up.

I don’t know him at all to be honest.
And once he’s bought the business and Iv got my money then I’m not overly concerned what he does to the reviews / reputation.

It’s more the risk of liability to me weeks, months, years down the line that I’m worried about.

 

[Mark T Jones]

Take professional advice- thus could come back to bite you

 

[Keith@LFC]

The accountants here I am pretty sure will have a view on taking a loan and then having it written off, I am no expert in that field but why can't he get investors on board now if he's so sure about the future and then purchase the business from you.

He plans to use the company’s credit worthiness to facilitate raising the funds. He can’t get capital without the company.

 

[WaveJumper]

Once you take your money and walks away who's to say he's going to "take care" of those liabilities, some how I think not

 

[Keith@LFC]

Take professional advice- thus could come back to bite you

I suspect you’re right and I’m hoping to get a call back from a solicitor tomorrow but, if it is a scam, I just wonder what his angle is…

 

[Keith@LFC]

Once you take your money and walks away who's to say he's going to "take care" of those liabilities, some how I think not

Possibly not, but who knows. Ultimately though how would that come back to me as being liable? And also, I do wonder what is end goal could be.

 

[Mark T Jones]

I suspect you’re right and I’m hoping to get a call back from a solicitor tomorrow but, if it is a scam, I just wonder what his angle is…

More likely he's incompetent/ a chancer

The legal advice is to ensure that everything is done properly and that you are completely removed

 

[Keith@LFC]

Thanks Mark.