Is this legal? Ethical advice needed
looking at payroll course
Registered Posts: 5 New contributor 🐸
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
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
0
Comments
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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?0
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