Incorporation of
existing business
Many businesses start out being traded either a sole trader or as
partnership. A partnership can occur whenever there are two or more people
working together with a common commercial aim - this may or may not be recorded
in a formal partnership deed.
It is sometimes the case that the owner of the
business will wish to convert the mode of ownership to a limited company -
this generally follows accountancy advice. It therefore follows that the
business has to be transferred from the owner to the company. Being a
transaction between the owners and a company which they will control it would
generally not be considered necessary or economically sensible to have a full
blown businesses sale agreement. It can be done in a more simplistic way.
Our template assumes that -
- the business is owned by a sole trader or
partnership
- the business does not own any freehold or leasehold
property (if the business does include a property then it may be that the
owners of the business will choose to retain ownership of the property and
grant the company a lease - click
here
for information about a lease - the original owners will then receive rental
income from the company)
- the purchasing company has been set up with view to
acquiring the business
- the owners of the business are directors of the
company
- the price to be paid by the purchasing company to
the owners of the business will be satisfied by shares in the purchasing
company being allotted to the sellers of the business
The pack that you download will contain the following
-
- form of business sale agreement
- notice of extraordinary general meeting
- minutes of meeting of the board of directors
- minutes of an extraordinary general meeting (EGM)
- companies form 88(2)
Purchase Price - £50
The
pack will download as a Zip file. Once downloaded the content will unzip to Word documents
(apart from the form SH01 which is in PDF format).
|
Business Sale Agreement |
£50 |
 |
The procedure that you should adopt is
- convene a meeting of the board of directors of the
purchaser company. The meeting will acknowledge the intention to acquire the
business and the sellers will disclose their interest in the
transaction as directors of the purchaser. The meeting will then be
adjourned so that the EGM can be held
- the EGM will be held. This confirms the directors
authority to allot shares
- the meeting of the board is reconvened. The form of
business sale agreement is produced to the meeting and approved. A
resolution is passed to allot shares to the sellers pursuant to the
authority conferred by the EGM
- the sale agreement is then completed
- the company books should be brought up to date by
adding in details of the allotment of shares
- a return of the allotment of shares should be made
to companies house using form SH01, This is in our pack or can be
downloaded for free from Companies House.. The address of Companies House is Crown Way
Cardiff CF14 3UZ or PO BOX 29019 21 Bloomsbury Street London WC1B 3XD.
Alternatively the 88(2) can be filed electronically at Companies House for
this service you need to register at Companies House at
https://ewf.companieshouse.gov.uk/seclogin
- the share certificates should be written out and
given to the Seller
Please remember that all businesses are individual.
Our template is necessarily quite general in nature. Whilst our template will
provide you with a good starting point it is unlikely to be suitable for use
exactly as it is downloaded - you will need to adapt it to suit your
particular business and the features of that.
If you are selling an existing business then click
here
The
documents downloaded from this web site will be in the form of a Zip file. Once downloaded it will unzip to a Word
document. You will need a zip utility to unzip the document - Windows XP
contains a built in utility. Alternatively shareware versions suitable for
unzipping a file can be obtained from the Internet - for example, click the Winzip
button at the side of this page.
The
documents available on this site have been prepared for use in England &
Wales. They may not be valid if used in other areas.
