Legal requirements for selling a business in the UK
There are a variety of motives to sell your small company, ranging from retirement to profit creation to simply not wanting to run the firm any more.
You have the option of selling your shares to a third-party buyer or giving them directly to your existing business partners. You might also consider transferring ownership of your stock into the hands of a family member.
Tak Matsuda from Crest Legal explains how to go about selling a business in the UK.
Here are some things to think about while preparing for your company’s sale. You may either sell the limited company together with its business or have your limited company sell its assets.
Share sale
When a company’s owner sells shares, it is called a sale of a limited company. If there are multiple owners, they must all agree to the transaction. The assets and liabilities of a firm are kept by the limited company. When the shares of a limited company are sold, both the assets and liabilities are transferred along with the business.
Selling assets
You could sell the assets of a limited company rather than selling shares of it. The goodwill, equipment, furniture and fixtures, accounts receivable, inventory, and money might be transferred to the buyer directly.
The company’s assets may be sold as a going concern. This is when you sell enough of the assets to keep the firm running in its current form. The company continues to serve its clients, suppliers, and employees.
Liability Transfer
Liabilities include accounts payable, salaries, taxes, and loans.
If a limited company is being sold, it is usually the firm’s obligations that are transferred to the new owner. The buyer will, of course, want to assess the liabilities before acquiring the business.
Getting the right legal advice
You must decide whether to sell a limited company or business assets to a buyer.
It might be difficult to understand the many sale alternatives and get your company ready to sell.
An expert can help you with the preparation, sale, and transfer of your company as well as assess any taxes you must pay when it is sold. There may be significant tax benefits to a certain course of action.