This article has been submitted by Peter Lynn and Partners.
Making the decision to take the plunge and start your own business is an exciting time. For many, the best way to get started is to purchase an existing business from someone looking to sell who has developed the company “foundations”. Although this may give you access to an existing, thriving business, there are multiple considerations that need to be taken into account if the process is to be smooth and successful!
Here are our top five tips …
- Have you taken the appropriate tax and accounting advice? Getting this wrong at the outset can prove very costly! Accountants work with us to ensure that we get the very best structure for you, not only for the ‘now’, but also for the future.
- What is your target business actually selling? Is it selling shares as a limited company or is it selling assets? Does this fit in with what you want for your own structure, or will there need to be a re-structure of the current business?
- Be clear on the structure that you want, going forward. Do you want to be a sole trader or a limited company? What suits you from a tax point of view and gives you the correct structure for future growth?
- If you are purchasing the shares of a limited company, you take on the debts of that company. Do you know what these are, or what they are likely to be? This could seriously change your appetite for the transaction, so get the information in the correct form. Do not rely on hearsay.
- Don’t ignore the employees! Even as an asset purchase, there are legal requirements under TUPE which means that you take on those employees on the same terms and conditions which they were on, previously. Make sure you know exactly whom you are employing and on what terms. This could be a real deal breaker.
These are just a handful of the factors you must consider before making a final decision however one thing is certain, be sure to seek professional legal advice. At Peter Lynn and Partners, we have a team of experienced experts covering all aspects of Employment, Property, Company and Commercial Law. To arrange a confidential initial meeting, please email [email protected].