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New Practice

New Practice

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Hello, 

I have been a sole practitioner for a number of years and incorporated to a Ltd company 3 years ago. I have recently been given the opportunity to buy a practice off a colleague I've know for years on the understanding that I keep one of the employees on and give him some shares. I decided to completely start a new company, with a new name, logo etc.... I will obviously have some goodwill re the purchase of the other practice, but my question is what happens to the remainder of the goodwill in my old company and what is the most tax effective way for me to transfer my old business into the new company? In the new company I hold 75% of the issued share capital. 

Someone has mentioned a share for share swap?

Any advice would be greatly appreciated.

Thanks

Alison

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By Moonbeam
18th Apr 2016 13:14

Not a direct answer but..

I would be very wary of taking on someone else's employee - not to mention giving him shares. It will be your company and your business from the time of purchase and this employee might not fit in with what you deem best for the business.

The requirements of your friend seem to me to be excessively onerous and I suggest you tell him you only want the clients. I'd be surprised if anyone else would do this sort of deal with him, so you may find he compromises.

 

 

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By stokeslole
18th Apr 2016 13:21

Thanks for your comments, I failed to mention that I have also known the employee for years and we actually started our training together many years ago. He knows all the clients I am taking on and pretty key to the practice so I don't have any concerns there. I only mentioned him, as that was partly why I decided to set up a new company rather than just incorporate the other one into my existing company. My concern was more about transferring my old practice, but thank you anyway :-)

 

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Hallerud at Easter
By DJKL
18th Apr 2016 14:12

Depending on circumstances

Moonbeam wrote:

I would be very wary of taking on someone else's employee - not to mention giving him shares. It will be your company and your business from the time of purchase and this employee might not fit in with what you deem best for the business.

The requirements of your friend seem to me to be excessively onerous and I suggest you tell him you only want the clients. I'd be surprised if anyone else would do this sort of deal with him, so you may find he compromises.

 

 

Depending on circumstances the acquirer may have little choice taking on the employee; TUPE can restrict the scope of options anyway and any such restriction will possibly apply irrespective of the purchaser; TUPE is complex and may be subjective ( at times).

So far from no other purchaser being willing all prospective purchasers may be required to take on the employee.

The shares are another issue and may also carry certain tax implications vis a vis employer/employee.

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