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View Full Version : Selling a the company instead of closing ?



supergal
7th October 2010, 10:55
I have a 3 years old contractor`s LTD that is being closed, it has turnover below 100K each year. Are there people who might be interested in buying it ? For the healthy histroy , etc . And what money ?

Old Greg
7th October 2010, 10:57
I have a 3 years old contractor`s LTD that is being closed, it has turnover below 100K each year. Are there people who might be interested in buying it ? For the healthy histroy , etc . And what money ?

Is the 3 year old bored of it now?

Xenophon
7th October 2010, 10:59
eBay it.

chef
7th October 2010, 11:02
More out of curiosity, what would you include with the business? i.e what value does it have?

I assume you set up shares for £1 when you first started. So share value = £1, or would you not include these in the sale?

I would also assume you would remove all capital from the bank minus HMRC bills.

Would you include company assets such as the laptop, printer/fax/scanner and/or mobile I assume you acquired via the company? If not would these be written off in company accounts?

Would you pay any fees in transferring company details i.e accountancy drawing up company accounts to date, legal writing the contract of sale, any possible Companies House fees? or would the buyer assume these costs. This could be quite significant and if more than £150 the buyer could form there own company.

Would you include the company website, stationery etc. this may add £150 to the value at a guess.


Essentially, what would be included, what do you value your company at and what are you looking to sell it for?

Drewster
7th October 2010, 11:03
More out of curiosity, what would you include with the business? i.e what value does it have?

I assume you set up shares for £1 when you first started. So share value = £1, or would you not include these in the sale?

I would also assume you would remove all capital from the bank minus HMRC bills.

Would you include company assets such as the laptop, printer/fax/scanner and/or mobile I assume you acquired via the company? If not would these be written off in company accounts?

Would you pay any fees in transferring company details i.e accountancy drawing up company accounts to date, legal writing the contract of sale, any possible Companies House fees? or would the buyer assume these costs. This could be quite significant and if more than £150 the buyer could form there own company.

Would you include the company website, stationery etc. this may add £150 to the value at a guess.


Essentially, what would be included, what do you value your company at and what are you looking to sell it for?

Don't feed the troll

MarillionFan
7th October 2010, 11:10
Don't feed the troll

Why? Are you not hungry Woderick???

supergal
7th October 2010, 11:55
More out of curiosity, what would you include with the business? i.e what value does it have?

I assume you set up shares for £1 when you first started. So share value = £1, or would you not include these in the sale?

I would also assume you would remove all capital from the bank minus HMRC bills.

Would you include company assets such as the laptop, printer/fax/scanner and/or mobile I assume you acquired via the company? If not would these be written off in company accounts?

Would you pay any fees in transferring company details i.e accountancy drawing up company accounts to date, legal writing the contract of sale, any possible Companies House fees? or would the buyer assume these costs. This could be quite significant and if more than £150 the buyer could form there own company.

Would you include the company website, stationery etc. this may add £150 to the value at a guess.


Essentially, what would be included, what do you value your company at and what are you looking to sell it for?


no no . Apparently some people are interested in buying LTDs just because it existed for few years and had healthy accounts. I guess it can then be used to get loans or something more easily...

Clippy
7th October 2010, 12:06
I have a 3 years old contractor`s LTD that is being closed, it has turnover below 100K each year. Are there people who might be interested in buying it ? For the healthy histroy , etc . And what money ?

Let me guess, going back to Oz?

supergal
7th October 2010, 12:11
Let me guess, going back to Oz?

going nonresident ...

chef
7th October 2010, 12:24
no no . Apparently some people are interested in buying LTDs just because it existed for few years and had healthy accounts. I guess it can then be used to get loans or something more easily...

but you haven't answered my question, what is it exactly you are considering selling?, what do you value it at? and how much we're you hoping to get for it? If you want someone to invest in or buy out your co. you have to do a bit better than

"umm errr <looks down, shuffles shoes umcomfortably> so would you like a company? it's good, honest"

You don't put an advert online saying

"apparently some people would like to buy a car so I'm selling mine as it's a healthy running car"

you say something like

"for sale: <make> <model> car for sale, <trimmings/outstanding qualities to tempt possible buyer to buy>, worth <large figure based upon your opinion of previous details>, selling for <smaller value to make it look a good deal> for a quick sale"

supergal
7th October 2010, 12:39
but you haven't answered my question, what is it exactly you are considering selling?, what do you value it at? and how much we're you hoping to get for it? If you want someone to invest in or buy out your co. you have to do a bit better than

"umm errr <looks down, shuffles shoes umcomfortably> so would you like a company? it's good, honest"

You don't put an advert online saying

"apparently some people would like to buy a car so I'm selling mine as it's a healthy running car"

you say something like

"for sale: <make> <model> car for sale, <trimmings/outstanding qualities to tempt possible buyer to buy>, worth <large figure based upon your opinion of previous details>, selling for <smaller value to make it look a good deal> for a quick sale"



What you sell is "it existed for few years and had healthy accounts".

Somebody mentioned this possibility , I don`t know anything more really. And I assume you wouldn`t get more than 1 K anyway.

Drewster
7th October 2010, 12:42
What you sell is "it existed for few years and had healthy accounts".

Somebody mentioned this possibility , I don`t know anything more really. And I assume you wouldn`t get more than 1 K anyway.

Why don't you just read Chefs excellent posts then answer his questions.... He might even make an offer.

PS Circa 1K for "it existed for few years and had healthy accounts" ain't gonna happen.

TestMangler
7th October 2010, 12:53
It depends entirely what the buyer was looking for.

For example, if you start a company today to import processors and RAM, then sell them abroad, you'll have trouble getting HMRC to clear you for VAT registration. A history helps so has value.

If you want to buy large amounts of wholesale computer hardware and have no trading history, you will be unable to use the experian cheque clearance thingy or may fail checks to allow you 30 day credit accounts with suppliers. A history has value.

Probably, asking a bunch of contractors who have only ever started a company to avoid PAYE, is not the best forum. Find people who trade in company registrations and ask them, rather than the average inexperienced contractor on here.

HTH..

Xenophon
7th October 2010, 12:56
It depends entirely what the buyer was looking for.

For example, if you start a company today to import processors and RAM, then sell them abroad, you'll have trouble getting HMRC to clear you for VAT registration. A history helps so has value.

If you want to buy large amounts of wholesale computer hardware and have no trading history, you will be unable to use the experian cheque clearance thingy or may fail checks to allow you 30 day credit accounts with suppliers. A history has value.

Probably, asking a bunch of contractors who have only ever started a company to avoid PAYE, is not the best forum. Find people who trade in company registrations and ask them, rather than the average inexperienced contractor on here.

HTH..

http://cdn.bikechatforums.com/files/vic___bob_handbags.jpg

chef
7th October 2010, 12:58
What you sell is "it existed for few years and had healthy accounts".

Somebody mentioned this possibility , I don`t know anything more really. And I assume you wouldn`t get more than 1 K anyway.

Ok, we're getting there, you think 1 grand is a good value for your co. I'll persist as I'm genuinely interested. Lets play yes/no then instead as you seem either pretty cagey or you're hiding something.

If I pay you £1,000 for your co.

Would I get:
-a company bank account?
-any cash capital?
-any other capital (printers, phones, office signs, stationery etc.)
-legal rights of company ownership?
-any electronic rights i.e Domain Name, Website, control of any hosting packages currently assigned to the business
-100% share rights
-100% control over the company (i.e you are not a silent partner or non-exec director)
-company logo rights/templates

Some yes/no questions about the company's health and the sale:
-does the company have any debts in any form whatsoever?
-will there be sufficient funds included in the company accounts to cover any bills up to the point of sale?
-will you pay for an accountant to draw up company accounts up to the point of sale including any future income/debts/expenditure you are aware of?
-will you pay for any costs in transferring the company from you to me inlcuding bank account, web space, domain name transfers and any other associated company details.
-will you pay for a solicitor to write a contract to state the answers to my above questions?


In fact I'm selling a pen here, It's existed a few years and still writes, shall we swap for your co.? I was thinking of selling it for a grand as someone mentioned it was possible so it seems a fair deal so far unless i get further details.

If you want to know if the pen i'm selling is a rare collectors edition mont blanc or a biro I swiped from Argos then if you tell me further details about what I might get if I purchase your co. for £1,000, I'll tel lyou more about my pen and you can then decide if I should dip into my future childrens hard earned inheritence or swap it for a pen.

chef
7th October 2010, 13:07
It depends entirely what the buyer was looking for.

For example, if you start a company today to import processors and RAM, then sell them abroad, you'll have trouble getting HMRC to clear you for VAT registration. A history helps so has value.

If you want to buy large amounts of wholesale computer hardware and have no trading history, you will be unable to use the experian cheque clearance thingy or may fail checks to allow you 30 day credit accounts with suppliers. A history has value.

Probably, asking a bunch of contractors who have only ever started a company to avoid PAYE, is not the best forum. Find people who trade in company registrations and ask them, rather than the average inexperienced contractor on here.

HTH..

I do so love people who make sweeping judgements about others..

and you are?

The OP has not yet stated that the company trades large wholesale computer products he's simply said he wants to sell a co. rather than close it and wants a grand for it. I'm simply asking for further/any details.

TestMangler
7th October 2010, 13:15
I do so love people who make sweeping judgements about others..

and you are?

The OP has not yet stated that the company trades large wholesale computer products he's simply said he wants to sell a co. rather than close it and wants a grand for it. I'm simply asking for further/any details.

Whether or not the company has traded in computer parts, sports socks or lighters (FOUR FOR A PAHNND !!) matters not a single bit. If it has an unblemished trading history for two or three years, that has value for some people. That's all.

If you look at people who trade in 'off the shelf companys' you will see adverts for companys that have 'never traded' or '3 years accounts, current certificate of non trading'. As I said, it depends on what the buyer needs.

If you have a reason to want a clean company with a couple of years history, then it's worth something to you. If you don't, then it's not. If 'used' companys didn't have a value, then no one would be trading them :-)

chef
7th October 2010, 13:22
And if you read my posts carefully you will see that I'm asking what do I get for the OP's perceived £1,000 value of his company?, is it solvent? will the OP prove it, who will incur the costs of this purchase and transfer etc.

These are not too tasking or personal questions IMO.

If I was looking for a company to purchase and go via one of the official vendors then for starters they tell you what you can expect to get on their website, you also know you have certain rights if what you purchase is not what you get. If I purchase the same thing from Ebay I would always ask questions to ensure what I believe I'm buying is what I'll actually receive. I believe it's called due diligence, this website might help the OP prepare for what people may ask.

Due Diligence Checklist: How to Perform Due Diligence on a Business (http://www.experienced-people.co.uk/1059-business-due-diligence/)

TestMangler
7th October 2010, 13:27
Chef, you seem to think I was having a go at you. Not the case.

I was trying to point out to the OP why selling his company may work for him and examples of why someone my want to pay for it.

I also advised him that he may want to go to the professionals for advice. (In a round about kind of a way :happy )

Wasn't having a pop at the questions you were asking. You are correct, if the OP tries to sell a company himself, he'll need to be able to answer all of your q's and more.

d000hg
7th October 2010, 13:28
I do so love people who make sweeping judgements about others..In general though, he's right. The odd proper company here doesn't change the fact that in general CUK members are not typical companies. That's the point of a generalisation...

alreadypacked
7th October 2010, 13:29
going nonresident ...

So where are you going for the next 4 years ?

minsky1
7th October 2010, 13:39
Im with testmangler on this one ..... by virtue of it having a trading history it does has a value.

As he says, its the wrong forum to ask the question as from a contractors perspective as you wouldnt need a company with a trading history.

If your tendering for a local governement contract for example and you have the experience but your company does not have the 3 year accounts history, your response will not be shortlisted.

Obviously what the company trades in will have a bearing on whether its of use to the new owner. If its a personal service company, then I would doubt it, unless the new owner has some opportunities lined up which require production of 3 years worth of accounts and his current tax avoidance vehicle doesn't have this.

Ravello
7th October 2010, 13:56
Whilst there might be some value associated with a 3 yr trading history, the full value of the company can not be assessed without answering at least some of, if not all of Chef's questions...

TestMangler
7th October 2010, 13:58
Whilst there might be some value associated with a 3 yr trading history, the full value of the company can not be assessed without answering at least some of, if not all of Chef's questions...

Absolutely. Said that in post #19. (If he was selling it himself).

Clippy
7th October 2010, 15:41
So where are you going for the next 4 years ?

Pentoville?

alreadypacked
7th October 2010, 15:45
Pentoville?

:rollin:

wantacontract
7th October 2010, 15:59
Ok, we're getting there, you think 1 grand is a good value for your co. I'll persist as I'm genuinely interested. Lets play yes/no then instead as you seem either pretty cagey or you're hiding something.

If I pay you £1,000 for your co.

Would I get:
-a company bank account?
-any cash capital?
-any other capital (printers, phones, office signs, stationery etc.)
-legal rights of company ownership?
-any electronic rights i.e Domain Name, Website, control of any hosting packages currently assigned to the business
-100% share rights
-100% control over the company (i.e you are not a silent partner or non-exec director)
-company logo rights/templates

Some yes/no questions about the company's health and the sale:
-does the company have any debts in any form whatsoever?
-will there be sufficient funds included in the company accounts to cover any bills up to the point of sale?
-will you pay for an accountant to draw up company accounts up to the point of sale including any future income/debts/expenditure you are aware of?
-will you pay for any costs in transferring the company from you to me inlcuding bank account, web space, domain name transfers and any other associated company details.
-will you pay for a solicitor to write a contract to state the answers to my above questions?


In fact I'm selling a pen here, It's existed a few years and still writes, shall we swap for your co.? I was thinking of selling it for a grand as someone mentioned it was possible so it seems a fair deal so far unless i get further details.

If you want to know if the pen i'm selling is a rare collectors edition mont blanc or a biro I swiped from Argos then if you tell me further details about what I might get if I purchase your co. for £1,000, I'll tel lyou more about my pen and you can then decide if I should dip into my future childrens hard earned inheritence or swap it for a pen.

You must be on the bench right now....no way you'd type out such detailed response for every post!!

;)

fullyautomatix
7th October 2010, 16:08
Im with testmangler on this one ..... by virtue of it having a trading history it does has a value.

As he says, its the wrong forum to ask the question as from a contractors perspective as you wouldnt need a company with a trading history.



It is not a wrong forum to ask the question. This isnt Mumsnet, this is a forum filled with educated bright IT contractors who know a bit about setting up companies etc.

chef
7th October 2010, 16:42
You must be on the bench right now....no way you'd type out such detailed response for every post!!

;)

bench? what's that? I've been working hard here in Munich for the past 2 years. Ok things are a bit slow right now but only because deadline was last friday and now it's in the test team's hands.

Old Greg
7th October 2010, 16:48
It is not a wrong forum to ask the question. This isnt Mumsnet, this is a forum filled with educated bright IT contractors who know a bit about setting up companies etc.

Thanks, I really needed a laugh today.

alreadypacked
7th October 2010, 17:03
Thanks, I really needed a laugh today.

You need access to my inbox, the thought that pops into my mind while reading emails from business is "are you on drugs" :suicide:

5 more weeks

SupremeSpod
7th October 2010, 17:07
You need access to my inbox, the thought that pops into my mind while reading emails from business is "are you on drugs" :suicide:

5 more weeks

Just think of the money, honey!

DeludedAussie
17th October 2010, 12:43
Did the OP actually end up getting advice of whether a company with history is worth retaining?

What figure did he manage to get? This would certainly be a help to a few people on here going forward I would think