Purchasing a business that has ceased trading

[darryl]

Hello all,

I’m looking to start up a small business / open up a business bank account etc and have been advised that the best / easiest / quickest way to go is to purchase an already existing company that has stopped trading (apparently there are loads of these about and it would only cost around £100?) … change the name / details etc etc etc then approach the appropriate bank with a view to opening an account.

My only problem is I have no idea where to start / how this is done; and my dear friend google is returning nothing useful

Any advice would be much appreciated

[RawRob]

If you want a Limited Company that might be a way forward, but depending on what your business is, starting out as a sole trader might be a better solution. I'm sure one of the accountants will be along soon to explain more...

Rob

[stephendoyle]

hi darryl

firstly i would devise a business plan and go into the banks and if your not asking to borrow much or at all you should get a business account.

secondly i think what you are describing is buying a dormant company; so you would need an off the peg solution so i recommend these (i am not an affiliate)

http://www.cscompanyservices.co.uk/company-list.asp

you can buy an off the peg company and change the name as well.

they will advise of banking options too.

there are other companies that can help as well.

good luck

regards
stephen

[darryl]

Thank you both very much for your advice; and thank you Stephen for the link, much appreciated.

[James Smith]

Darryl,

if you buy a company that has "ceased trading" then don't forget you will no doubt be buying lots of historic legal issues and have to pay all the old creditors too! This is a seriously bad idea and is probably not quite what was suggested to you.

Forming a brand NEW company with yourself as first named shareholders and directors is almost always the best thing to do if you need a limited company structure. Companies can be formed within 3-4 hours for about £35. Buying companies "off the shelf" is a old fashioned idea that stems from when it took days or weeks to form a company but you wanted one fast. It can have unwanted side effects in terms of opening a bank account in terms of proving you now own it and not the formation company!

More widely as Rob mentions, are you sure you actually need a limited company? Most people starting up in business do so as a sole trader until the business model is proven and you are making decent money, at which point going to a limited company can them make sense. Generic threshold is £25-30k profits but it depends on what you are doing if going ltd from the off make sense. The word "small" in your post suggests its worth looking at both sides.

hope that helps

Regards,