Purchase of a busienss withour debtors and creditors
sweta
Registered Posts: 13 New contributor 🐸
Hi,
I have a client who is buying an existing business and has asked me to review last years balance sheet and P & L account. This business has debtors and creditors on their balance sheet.
In his discussion with the business agent he has been told there are 2 ways to handle this, the first being that he purchase the shares of the owners in the business. This will however mean that debtors and creditors are taken over by my client (which he does not want). Second option is that if he goes ahead with the purchase that his company purchases the goodwill, fittings and stock. The selling company will change company name while taking over the debtors and creditors. The name ABC company will then also be handed over to my client
Can you recommend a method whereby he can avoid taking on the debtors and creditors, obtain the business with their companies house registration number ?
Never come across this scenario any help and advise would be highly appreciated.
I have a client who is buying an existing business and has asked me to review last years balance sheet and P & L account. This business has debtors and creditors on their balance sheet.
In his discussion with the business agent he has been told there are 2 ways to handle this, the first being that he purchase the shares of the owners in the business. This will however mean that debtors and creditors are taken over by my client (which he does not want). Second option is that if he goes ahead with the purchase that his company purchases the goodwill, fittings and stock. The selling company will change company name while taking over the debtors and creditors. The name ABC company will then also be handed over to my client
Can you recommend a method whereby he can avoid taking on the debtors and creditors, obtain the business with their companies house registration number ?
Never come across this scenario any help and advise would be highly appreciated.
0
Comments
-
(which he does not want) means your client wants to buy the business premises, fixtures and fittings, goodwill if any.
"Can you recommend a method whereby he can avoid taking on the debtors and creditors, obtain the business with their companies house registration number ?"
It's not clear to me what you mean here. You can't just dump the debtors and creditors by changing the shareholders of the company, if that's what you mean.
0 -
In many cases the person purchasing the business does not wish to take on the previous company as a whole entity. This means taking on another company's accounts history, VAT history, PAYE history and the potential for investigations to still pop up as well as taking on their debtors and creditors.Regards,
Burg0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 323 NEW! Qualifications 2022
- 165 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 88 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 273 Tax
- 135 Bookkeeping
- 7.2K General accounting discussion
- 200 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership