Is this legal? Ethical advice needed

looking at payroll course
looking at payroll course Registered Posts: 5 New contributor 🐸
in Chat and off-topic discussion
A sole trader has been trading for over 10 years, making profit every year. He makes a loss for the 1st time and sells the business as a going concern for £1 to an employee. The business continues to trade from the same premises (he owns the property with a mortgage and rents the shop and flat above to the former employee). A clause was put into the sale that the stock would be paid for as it was sold.

3 years pass and the former owner takes repossession of the business. I don't know if any money changed hands this time.

When originally trading, the business/sole trader was registered for VAT.

Can someone advise me as to whether this is ethically and legally allowed?

Thanks

Comments

  • sdv
    sdv Registered Posts: 585 Epic contributor 🐘
    The answer to both of your question is YES

    If you bought a car for £2000, what's to stop you selling your car for £50? or even give it away for free to your friend? It happens all the time!

    The owner did not sell the business for a £

    He rented the premises and got paid for the stock. payment for a £1 was for the goodwill.

    there are businesses today who would pay you to take over their business because they are legally tied into a long term lease.

    VAT registration can be changed to the new owner if the business is sold. no problem there.

    May I ask why are you asking these questions? are you an employee there?

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