Transfer of Company

Alanooh

Hi all,

Long time reader, first time poster.

Looking to take over a small business from my girl friend.
She was running the online store (home based) for the last four years while working as a hobby, started with a small budget and has grown.

I used help her all the time so I know it inside out.

She kept investing the profit in to the business to get more stock as she had a full time job and didnt need an income from the website.

Now im looking to take over the business and out of her name, I want to keep the same company name, she is giving me the website and stock.

Question, is there a form for transfer of ownership or how does this work.
There was no employee's or real profit made.

Thanks
Alan.

mneylon

Is it a limited company or just a registered business?

Alanooh

Blacknight wrote: »

Is it a limited company or just a registered business?

Hi,

Its a reg business.

pedroeibar1

It is a relatively straightforward transaction for both buyer and seller, once the correct decision on how to structure the sale is agreed. If you are buying the company, rather than business assets, (not always the best thing to do) it’s a simple share sale/purchase transfer arrangement, with some forms that need to be signed and filed at the CRO. However, as you are posting here for advice, you (and probably your g.friend) have not fully considered the underlying financial factors so both of you need to talk to a professional. There are important issues that need to be examined/explained, tax position, asset/liability questions, etc. to be asked so an accountant is the best first port of call as many of the important questions are ‘figures’ based rather than ‘law’. Do it right.....

Alanooh

Thank you,

Its mainly the correct forms needed/procedure on transferring ownership.
As business assets side of thing wont be much of a problem.

pedroeibar1

Alan,
Your posts show that you are not very clear on what is happening.

Alanooh wrote: »

Looking to take over a small business ......... running the online for the last four years ......started with a small budget and has grown...........She kept investing the profit in to the business to get more stock ......................Now im looking to take over the business and out of her name, I want to keep the same company name, she is giving me the website and stock.......There was no employee's or real profit made.

As I said above you need proper advice. If there are assets there are liabilities. If these are small there are profits. That means tax issues. You have not answered the question on buying the company or the business - there is a huge difference between the two.
The forms required (if buying the co) are the least of your worries, the other questions are much more important, which is why you need proper advice, not a few comments from here.

mneylon

pedroeibar1 wrote: »

Alan,
Your posts show that you are not very clear on what is happening.

As I said above you need proper advice. If there are assets there are liabilities. If these are small there are profits. That means tax issues. You have not answered the question on buying the company or the business - there is a huge difference between the two.
The forms required (if buying the co) are the least of your worries, the other questions are much more important, which is why you need proper advice, not a few comments from here.

They already said it wasn't an LTD

pedroeibar1

Blacknight wrote: »

They already said it wasn't an LTD

Hi Blacknight,
The OP’s response to your earlier question was ‘Its a reg business’ . That is at best meaningless because there is no such legal entity – the operation is either a registered company or it is a sole trader e.g. Jane Smith trading as ‘XYZ’ which has been registered as XYZ business name. A reg. business name does not result in the creation of an entity with separate legal personality, the 'entity' is Jane Smith.

Assuming it’s the activities of a sole trader we are talking about, simply because there is a willing buyer and a willing seller does not mean the complex issues behind the disposal of the activities can be ignored. What are the liabilities? To whom do they belong? Any danger of product or liability claims? Does the vendor want them or potential liability transferred? What is the Revenue position (as it stands 'vendor' is responsible.) How are the suppliers to be informed? All sole traders can be sued personally and are liable for the full debts of their business, even to the extent of bankruptcy proceedings being brought against them. What indemnities are sought/given/considered? How many creditors are there? Will they be happy to trade on same/similar terms? Who owns the website/domain name? Has the business name been trademarked? Who owns that trademark? etc, etc.

Disposal of the business of a sole trader actually can be much more difficult than the disposal of a company.There are several steps that need completion, professional advice is required, not just a few quick comments here.

Peterdalkey

it is far simpler than is being suggested, if ~I understand correctly. we have a sole trader with a website and a bit of stock.
It seems to me you sell the registered business name, website, domain name for a nominal sum. There are unlikely to be any credit trade supplier creditors, any tax /revenue issues remain with the vendor. To my mind a simple signed agreement of what is being transferred. it is a simple disposal by the vendor.

bulleyes

Not sure about the transfering part of it but if theres stock there is profit.

Stock value is taxable in the same way cash in the bank is.

Peterdalkey

profit is calculated by subtracting the cost from the ultimate sales proceeds of that stock. Your assertion is most likely complete bunkum!!

pedroeibar1

Peterdalkey wrote: »

Your assertion is most likely complete bunkum!!

In fairness to bulleyes' post that is not quite right, if you read the OP - 'She kept investing the profit in to the business to get more stock as she had a full time job and didnt need an income from the website.' So there has been profit for some years, it has been invested in stock, so there is a tax liability at some stage. Both the vendor and O P need independent advice.

From a legal perspective your answer also is probably incorrect because it is not based on full disclosure - the OP has given garbled and insufficient info.

I've no issues with somebody making broad outline suggestions in response to anyone with a query or requiring clarification, but I've always understood that this forum is not the place for legal advice. I've said my bit, gone from this discussion.

Peterdalkey

and if she dealt with her tax affairs correctly, taxation on those profits has been paid! As a sole trader they are available for tax paid drawings by way of sale.

Alanooh

Just a few things.

Yes my mistake she is a sole trader.

Business was started with just €1200, hobby business and all monies from sales were put back in to the business for it to grow.

And to Peter your going a bit over the top this is a tiny business, no credit outstanding on anything, items are bought outright from China and sold on the likes of eBay, now theres about €2000 in stock and about €1300 in the bank.

Yes I know there will be tax outstanding if she as a sole trader is stopping cause of a full time job just not enough time or interest anymore to run this hobby.

I thought I was asking a simple enough question to tell the truth.
Was hoping it didn't have to go down the road of an accountant as I was thinking they charge me a few hundred just for something that could be quite easy.

Axwell

Ok lets look at clarifying a few things here and avoid any more confusion

OP - your gf has run a business for a number of years as a Sole Trader. She is now looking to transfer that business to you as she doesn't have the time to work on it and you are going to take it over. It is not a limited company.

I don't see really what all the complication is - the business needs to be sold to you for a nominal amount as PeterDalkey already said and this includes the website, the stock and the business itself.

Your GF would have her own tax affairs in relation to sales in the business. Those would need to sorted, and its not evident from your post where those are.

The best solution would be to go to an accountant and pay a few quid to make sure everything is up to date and signed off and then get everything changed to your name. While the process is simple enough it still needs to be done correctly so it doesnt come back to bite either of you in the ass regardless of how much profit/sales or how small the business is.