Taking on an exisiting company

[itwiltshire]

Hi all,

Since 2006 I have been trading as a local computer support company, i went limited in August 2008 and I am now looking to expand into a retail shop.

There is a local shop offering the same services as me which has been run-down and generally not run properly that is now up for sale for £15 which includes "fixtures and fittings", the name, stock and a handover.

After viewing the shop, the stock was effectively wortheless as half of it would have to have specialist removal to get rid of it.

The name was recently publicised in the local paper for selling dodgy copies of windows and the shop needs a complete refit.

I explained this to the current owner and offered him £3k to buy him out of the lease providing he wound up the company himself as i already had a company name that i would use, this offer was refused as were further offers of £4k and £5k, the seller explained that he would only sell the business as a going concern and would not close it down himself

My question is, are there any problems with me taking on his comapny then immediately winding it up and trading under my current name after re-negotiating the lease with the leaseholder?

Apologies if this doesn't make sense or if i have missed anything, any advice would be greatly appreciated.

[Indizine]

So you are essentially buying the business only so you can get the lease, is that correct?

[itwiltshire]

yeh, that's pretty much it,

the shop is the perfect size/location/price for me and there is nothing else available even close to being as good.

I just want to make sure i'm not legally liable for things the old owner "probably did" mess up.

i also dont want to honour any warranties/breakages that are from when he owned the shop. Hence trading under my name.

[Indizine]

So far as I know, and as long as the Landlord is made aware, you can trade under name name you like, and the business can start afresh in your own name.

[Paul Norman]

No problem, probably, with the Landlord, although changing the company on the lease will incurr some legal fees potentially.

Taking on a company has a big caveat emptor on it, though. You take on the hidden liabilities. You should seek garuntees from the current owner for any customer and staff issues that may crawl out of the woodwork relating to prior to the day of acquisition. Be squeaky with the contract, and get a good solicitor on the case. A company is a legal entity in its own right, and that becomes yours, and your problem, when you acquire it.

[itwiltshire]

thanks for the advice guys,

i'll get a solicitor onto it.

But basically you are saying there shouldn't be a massive problem becoming owner of his company and then closing it down?

[Indizine]

If there are any , you will need to transfer the staff over to the new company, so you cant get rid of any you dont want or like, as a result of winding down the old company.