Taking over a business

[Dan4]

Help!
I have the opportunity to buy a small business at a very decent price. The current owner will be leaving the country. I know it is usually better to set-up your new LTD, but my question is: What steps do I need to safeguard against inheriting any existing debts, liabilities, or outstanding financial obligations associated with the company? The current owner told me that he will present any documents that I will ask for(eg corporation tax, VAT, etc)

 

[fisicx]

Engage a solicitor and an accountant to do all the due diligence. It's not a quick process and can take many months to do the necessary checks. If the current owner is pushing for a quick sale there could be all sorts of hidden issues.

What type of business is this? How much are they asking?

 

[Bobbo]

Help!
I have the opportunity to buy a small business at a very decent price. The current owner will be leaving the country. I know it is usually better to set-up your new LTD, but my question is: What steps do I need to safeguard against inheriting any existing debts, liabilities, or outstanding financial obligations associated with the company? The current owner told me that he will present any documents that I will ask for(eg corporation tax, VAT, etc)

The simplified version is:
- buy the company and you take on everything warts and all
- buy the trade and assets from the company and it's a clean break

 

[BubbaWY]

If the current owner is pushing for a quick sale there could be all sorts of hidden issues.

Especially if they are moving abroad.

I bought my first house from someone who was moving down under. Had a few problems once Id bought it and moved in with baliffs regularly on the doorstep. After speaking to Citizens Advice, I started opening his post and he owed about £90 in loans, credit cards, etc.

So definitely get due dilligence done.

 

[Bobbo]

Especially if they are moving abroad.

I bought my first house from someone who was moving down under. Had a few problems once Id bought it and moved in with baliffs regularly on the doorstep. After speaking to Citizens Advice, I started opening his post and he owed about £90 in loans, credit cards, etc.

So definitely get due dilligence done.

Assuming there was meant to be some more digits after the "£90" there!

 

[Paul Kelly ICHYB]

Use a limited company to buy and own his limited company!

As suggested, you need to do the diligence and an accountant will really help with this.

Buying the assets of the business outright, leaving them with the limited company is also a good solution
(as mentioned).

 

[BubbaWY]

Assuming there was meant to be some more digits after the "£90" there!

Oops, yes, three more zeros