How to sell a limited company

People decide to sell their limited company for a whole host of different reasons. However, the vast majority of business owners will choose to sell their limited company for the following reasons:

• Retirement
• Profit driven
• Simply not wanting to run the business anymore.

 

You can either sell your shares to a third party buyer, or if you have any existing business partner, you can also consider selling to them too! And remember, when

transferring ownership, you will need to refer to the articles of association and any shareholders’ agreement. These documents often contain provisions for buying and selling the shares in your company.

Of course, if you’re thinking about selling your limited company, it’s important that you understand the processes involved in. After all, your ultimate goal is to get the best possible price for your business, with the least amount of hassle, right?

First and foremost, you should be aware that, according to Gov.uk, when selling a limited company, your responsibilities will be different, depending on whether:

• You’re selling the entire shareholding in your limited company
• The company is selling part of its business

What happens if you are selling the entire shareholding?

If you’re selling the entire shareholding, you should first of all take any other shareholders or directors into consideration and then you will need to appoint new directors or company secretaries. You should appoint new directors before you resign as a director yourself

You must also make sure that you inform Companies House about these changes to avoid any penalties or complications along the way.

What happens if you’re the only director and shareholder?

If you are the only director or shareholder, you can sell your company without consulting anyone else – you are the only person that will need to approve the transfer of the shares to the new owner.

Of course, you should always seek professional advice from a qualified accountant who is trained to help you oversee this process, which can sometimes be complex.

 Completing a Stock Transfer Form

Finally, you will need to complete a Stock Transfer Form which outlines all of the details of the share transfer.

This form features the following information:

• Who is buying the business?
• Who is selling the business?
• The amounts/values involved.

 

VAT registration

As part of the process, if your company is registered for VAT, you should also transfer the VAT registration number to the new owner.

Again, a qualified accountant will be able to support you when it comes to handling any VAT queries.

 Tell your employees

If any employees are affected by the sale (for example the company’s selling its production business and factory staff will be affected), you must tell them about the changes, including:

• When and why part of the company is being sold
• Details about the redundancy terms or relocation packages, if necessary
• Make sure you don’t breach employees’ rights when a business changes ownership.

Do you need a solicitor to sell a limited company?

No, if you’re planning on selling your Limited Company, you will not need to worry about enlisting the help of a solicitor. However, it is a smart business decision to liaise with a solicitor when it comes to ensuring that you are protected during the negotiation stage.

Who owns the assets of a limited company?

 It is the company shareholders who own the business, however not the assets held within it. With this in mind, if you are the only shareholder, you should be aware that you do not own your company’s assets as they are owned by the company.

 Why choose React Accountancy?

Here at React Accountancy, we provide trusted accountancy services to start-up, established and multi-national businesses across a diverse range of industries.

From the moment you get in touch, our approachable, friendly and professional team will go above and beyond to ensure that you receive the right advice, support and accountancy solutions for your business.

All of our team has years of experience in providing accountancy services that support your business including complex financial issues.

Get in touch today for further information about any of our services.

You can reach us on 01914324110 or contact us via email using info@reactaccountancy.co.uk