My client, an individual, is a shareholder in a company(alpha). The other shareholder is a company which is a subsidiary of a multi international company, I will call this the parent company, Beta.
The company is currently trading and has been trading for a long time.
The shareholding are: 45 B shares for my client, Trevor, the other shareholder, company Beta, has 55 A shares. Both A and B shares have the same rights, voting etc.
My client wants to retire and sell the shares to the other shareholder, company Beta ( he had the shares for a long time and has been a diretor, for over 10 years).
When the sale is complete, the company(Alpha) will cease trading and close. The parent company(Beta) does not wish to keep the company without Trevor,so will stop trading and close imediately after they purchase the shares from Trevor. Beta will employ someone directly to do the job, selling the products in the UK rather than operationg via this company Alpha. Alpha company was set up to sell the products of the parent company, Beta. The structure was as above with the shareholdings 45 for Trevor and 55 for parent company Beta.
On the face of it, it appers that when Trevor sells the shares to the corporate shareholder, Beta, the consideration will qualify as capital gain and ER can be claimed.
Client does not wish to go through MVL.
Are there any implications if the company will then cease to trade?
Is the company a personal company even if the other shareholder is a corporate shareholder, a company listed on the stock exchange?
Any other points to consider?
Thank you very much for any advice.