selling a business (well sort of) query

favouriteflies

Hello everyone,

Can anyone offer me some advice. My partner and I have spent two years building up a business. Its an ecommerce business. We have a full site front and back end developed with all payment checking etc in place. We have built up a full supply chain and a really nice little system. Due to the fact that we both have full time day jobs and family and all the rest of it we just cant realistally run it anymore.

The only thing is that we never registered the business. We have essentially been running it as a hobby more than anything else. We now wish to sell it and pass it on to someone who could run it full time.

How do you go about selling on a business (stock and all) but without it actually being registered as a business?

Any suggestions are gladly received

Regards

Dave

Atlas_IRL

Im a bit confused where you not paying tax or anything?

You can register it on cro.ie. its not hard but there is a back log at the moment.
Register it as sole trader and just put your name on it.

Can you provide a link to the website?

Diairist

maybe you don't need a company to sell yr business? With a good accountant you mightn't even have to pay CGT:)

shoutman

Have you been running the business for two years (ie. two years of accounts?)

favouriteflies

Hi there,
thanks for the replies so far. Yes we have been running it for two years. We have basically done everything. Because of our situation with our day jobs we never registered it as a business or a partnership.

Our turnover was well below the tax threshold as we dont have time to push it forward and now want to pass the whole lot to someone who is interested in taking it to the next leverl.

Essentially its a turnkey package. just needs time and attention.

Any suggestions?

Atlas_IRL

You could try here
http://www.thebusinessshop.ie/
http://www.businessesforsale.ie/

The person buying it could just register it themselves.

BarryM3

Hi,

I've sent you a private message. Id be interested in your business

SueJ

Hi Dave

We get enquires like this regularly so you are not alone. Yes, as other have said, it is best if you "package" the company into a company format - it is a lot cleaner, but this can generally take a lot time. What buyers are worried about in your situation would be try to clearly identify what they are buying and what they are not. Issues regarding ownership of various items, tax, vat and other items - they do not want to jump up and bite them in 3 months time. Thus if it is nice and "clean" with clear records of the business being ran normally it will fetch a higher price. Check out our web site for lots more articles on buy and selling businesses - I think you will find them useful.

Regards

Sue Johnson
Office Manager
BizSales Business Brokers Ltd
www.BizSales.ie

professore

favouriteflies wrote: »

Our turnover was well below the tax threshold as we dont have time to push it forward and now want to pass the whole lot to someone who is interested in taking it to the next leverl.

I see. So your turnover was below zero. Interesting.

favouriteflies

professore wrote: »

I see. So your turnover was below zero. Interesting.

Apologies, when I said "tax threshold" I meant "VAT threshold"..... below the turnover threshold for VAT registration.

kenbrady

favouriteflies wrote: »

Apologies, when I said "tax threshold" I meant "VAT threshold"..... below the turnover threshold for VAT registration.

How did you pay tax if the business was not registered ?

blue4ever

It sounds like you are passing on a legal and tax headache to someone else - and your replies are particularly vague..

BusinessBroker

Hi Dave,

What you want to do can be achieved by selling the tangible and intangible assets you and your partner own. The new owner can set up a new Ltd co which acquires the assets from you and it can start trading under your old name or a new name depending on what he registers with CRO. You then take the proceeds from the sale of your business assets, square off what you owe to the Rev Comm including any CGT from the sale proceeds and split the remainder with your partner.

The assets you sell could include stock, computer equipment, domain name, website etc plus whatever goodwill you can negotiate. As a new startup with low sales to date the value of goodwill will be limited as the buyer will apply the principle of substitution i.e. he will compare the cost of buying your already set up business Vs the cost of setting up from scratch himself. How much blood sweat and tears you and your partner have put into setting up over the last two years doesn't really matter to the buyer if he believes he could set up a similar operation for €x and Y hours/days of effort. The same applies to unsubstantiated or bluesky "potential". Everything has potential but you need to be able to clearly demonstrate and measure it for a buyer to pay a premium for it.

If I was in your shoes with a very small start up business I'd generically summarise what's for sale without actually identifying the business in a few forums like this, advertise it on www.thebusinessshop.ie and www.businessesforsale.ie if you can afford it, carefully screen enquiries to make sure you only deal with people who are seriously interested, have signed an NDA and have proven they have funds available. Create a document which details the business including a SWOT, give it to each qualified buyer and ask them to make an offer. Pick the best offer, negotiate it as far as you can and then close the deal.

Hope this helps.

BusinessBroker