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Great Britain is a global center of business relations, and therefore invariably attracts the attention and investment of businessmen. Many entrepreneurs prefer to invest money in British businesses and often opt for purchasing an existing company. The country has a large number of small and medium-sized enterprises, so it is easy for a potential investor to find a suitable facility.
If you are considering the advantages and disadvantages of a private limited company, perhaps you should pay attention to purchasing a ready-made company. In this article, you will learn about the features of buying a business in England.
Buying a Ready-made Company in England is a Profitable Business Investment
Purchasing a ready-made British enterprise is considered the easiest way for those entrepreneurs who are just getting acquainted with doing business in the UK. This is justified by the fact that you do not need to spend time, effort, and nerves studying the appropriate type of business and the process of organizing it from scratch. The buyer immediately receives a business with well-established work, regular customers, profits, and with the right choice, an excellent reputation.
However, if you want to become the owner of a business that, for various reasons, is not currently functioning, then, with a small investment of money, you can revive and develop it with secured loans. It is also important to know the reason for selling the company, so as not to end up with big problems instead of a profitable investment.
What Do You Need to Know About Buying a Business in England?
Buying a company in the UK is not a problem. First of all, it is worth understanding the forms of ownership:
- LP. These are enterprises where one of the partners is the general. He bears full responsibility for the activities of the company. The remaining partners are responsible only to the extent commensurate with their share.
- LLP. These are enterprises that must have at least two founders. Such partnerships have a legal address on the territory of the state.
- LTD. These are companies in which the liability of each shareholder is limited to the number of shares. These companies have the right to operate in the UK and throughout the European Union.
Whether purchasing the securities of a business owner or purchasing the operating company itself, choosing the right way to do business in the UK is up to you. If you want to own shares in a company, then you will need the help of a qualified specialist to prepare a share purchase and sale agreement and other documents on the transfer of ownership.
When it comes to buying a company, a company purchase and sale agreement, an alienation agreement, a lease agreement, or a freehold transfer are drawn up. Regardless of the method of acquiring a business in England that is most suitable for you, you must definitely research the company on all financial and legal issues
Taxation When Buying an English Business
In the case of acquiring a business, the buyer has the opportunity to choose the assets and property of the company, that is:
- equipment,
- land,
- tools,
- cars and so on.
Buying a business in the UK is subject to the following mandatory taxes:
- Stamp Duty is a duty on property in England.
- The amount of stamp duty for a land plot is determined by the price of the property located on it. The stamp duty rate progresses depending on how much the property is valued at.
- VAT.
If you buy a UK business, it is quite common to have to pay VAT on the taxable property. In the case of purchasing an existing company, VAT is not paid.
Purchase of English Securities
The owner company continues to manage its business after the investor purchases shares. That is, business assets are not transferred, only the director, shareholder, and beneficiary of the enterprise are changed. If the purchase of a business in the United Kingdom occurs through the transfer of shares in the company, then stamp duty must be paid in the amount of 0.5% of the proceeds paid for the purchase. This rate applies to transactions over £1,000 and is paid by the buyer.
An experienced expert can advise you in more detail about these and other details of buying a business in England. The help of a qualified specialist will be needed to select a suitable project and properly organize the transaction.
How to Profitably Buy a Business in England?
There are many advantages and disadvantages of private limited companies and private companies as well as other forms of companies in the UK. If you are not ready to start a business from scratch, there is the option of purchasing a business. The popularity of this method is due to the fact that you do not need to spend huge personal and financial resources to open your own business.
The acquired business has already been organized and has been operating on the market for a certain time. Such an enterprise has its place in the market and occupies its niche, has a regular clientele and a good reputation, and makes a profit. The company has a business development program, marketing research, analysis, and correction of problem areas.
To make the right choice among the wide variety of offers on the English market of companies, we recommend contacting a professional specialist.
Final Thoughts
If you want to buy a UK company, you can do so by buying shares in the owner’s company or by buying the business itself. In the first case, it is necessary for specialists to prepare a share purchase and sale agreement and other documents confirming the transfer of the share.
If you still want to start a business in the UK from scratch, understanding all the advantages and disadvantages of starting a private limited company or sole trader in England, we recommend contacting Hoxton Mix, which provides profitable virtual office packages, including a legal address.
