Ok, I have been offered the chance to buy a limited company ( garage ). Now i already have a job ( motor factor ) and if i was to go ahead with this i would want to stay in my current employment. Now how would this work tax wise? I believe as long as i am only down as a shareholder and pay myself through dividends this is ok? I would plan to have my other half as a director and drawing a salary ( albeit a small one ). sorry for what seems like complete newbie questions but just want some others opinions as i think i understand. Of course if anyone sees any flaws in this please feel free to say.

 

Cheers in advance

Pop into your local Business Gateway office nezzi, they'll keep you right. Its the government's business support service, there's some basic info on the website but you'd be best having a sit down with an adviser to run through the options for you. There's some links further down the page that might help working out the tax situation for your mrs - http://www.business.scotland.gov.uk/bdotg/action/detail?itemId=1087521902&r.l1=1073861225&r.l2=1087216666&r.l3=1073865730&r.s=sc&site=202&type=RESOURCES

Tread carefully, notoriously difficult to place a value on any company in good or bad times, full financial accounts inspection is required or that small wage for your partner and your dividend may end up been much less than you are expecting, maybe even a negative in the first year or so after take over and never trust what your been told in business always double check everything.

 

Jeff TT

Good advice above, Call local Business Link and ideally a good reputable accountant for further advice. Jeff is absoultley right, do not assume good accounts are the basis of a sale price, alot can happen to a company in a few months or more after filing. Get up to date figures P & L's, Balance sheet and cashflow, busienss forcasts current sales ledger. Then look at customer base, for good repeat business (reputation counts for everything)

 

When a larger sum is involved for buying a business or where you are the sleeping partner, it's not uncommon practice to have the previous owners still involved for a period of time, at least to prove the company is operationaly as good as the sales pitch, if it falls over or does not perform then a financial penalty or reduced value can be applied.

 

Good luck.... at least you'l have your own lift for working on the Zed!

Yeah everything will be double and triple checked by someone far more qualified than me to determine all is as it seems. Even though he is a mate of mine and if it goes ahead i will be employing his brother i will not just buy it on a whim. It's a strange one as i planned to look at my own business in about 5-10 years time but i know this place very well, the location is superb and they have a great reputation already, and with plenty of scope for expansion.