A potentially straightforward method of doing this is possible if:
Â -Â The business to be purchased is set up in the form of a company.
Â -Â All the stock and assets including goodwill are owned by the Company.
Â -Â The Company offering the business for sale owns no other businesses or property.
Â -Â Any property occupied by the Company offering the business for sale is in the name of the Company (this ensures when completing the sale of the business any property in the name of the Company whether leasehold or freehold is transferred without the need for a separate transaction).
The following needs to occur to complete the sale and effectively transfer control of the company including ownership of property, goodwill, assets and stock:
A. The company’s solicitor must draft a Share Transfer Agreement (to enable the buyer to purchase shares from the Director(s) of the company).
B. A general meeting must be held by the Company and the Directors will need to vote in favour of:
Â -Â The share transfer
Â -Â The retirement of the director(s)
Â -Â The appointment of the purchaser as the new director
The directors must also decide the date by which the above changes will be made, minutes must be taken of the General Meeting and the decision of the director(s) must be filed (using the appropriate forms) at Companies House.
If all the above is completed on the same day, the buyer will successfully be appointed director of the Company (having purchased all the shares in the company).
A solicitor must always be used to draft any legal documentation, if you’re considering purchasing a business, get in touch with a lawyer from our Commercial Department who will be happy to help.