want to acquire an accountancy practice.

To buy an accountancy practice.

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Hi Everyone,

I am looking to acquire an accountancy practice. 

My question is, what are the things that I need to consider before signing on a deal? 

Also, we (are an ACCA firm) have an office in London (NW9 area) and I work from home in Exeter. Does anyone know of any practice that is for sale in any of these areas? Our budget is £400k but can be stretched to £500k. 

Thanks.

 

 

Replies (15)

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By Truthsayer
09th Jun 2020 10:34

'My question is, what are the things that I need to consider before signing on a deal?'

Er....about a thousand things! We could hardly begin to enlighten you with a few sentences here.

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paddle steamer
By DJKL
09th Jun 2020 10:51

Price and payment staging. clawbacks etc
Continuity of previous owner in the business for a period
Quality of clients' records
Age profile of clients being acquired
Quality and efficiency of previous Firm's working practices/processes
Details of Staff that will be transferred to you under TUPE
Any niche/specialist areas re the types of clients and whether your existing firm either has, or can acquire, the knowledge to cover these- being reliant on the staff acquired re particular skills could be dangerous.

Sure there are more.

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Replying to DJKL:
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By Amanacca
09th Jun 2020 12:14

Thanks.

I know that there a thousand things to get right but small snippets like your comment do help. :)

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By Cheshire
09th Jun 2020 11:07

How would you advise a client if they asked you the same question?

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By bernard michael
09th Jun 2020 11:07

I'd talk to a broker if you're spending that sort of money

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By New To Accountancy
09th Jun 2020 11:32

I've absolutely no experience in this field whatsoever but for what it's worth (I suspect nothing)....

Company 1 sold their business for £1 million to Company 2

Company 2, set up new company in sons name and the clients transferred over, even though clients were included in sale to Company 1.

Company 1, went bust.

This has always played on my mind when I hear of people purchasing established businesses. Although may not be relevant to your situation, so just get the best legal advice and let cost be no barrier.

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Replying to New To Accountancy:
paddle steamer
By DJKL
09th Jun 2020 11:53

I do not follow- company 1 is the seller, what relevance does it going bust have?

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Replying to DJKL:
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By New To Accountancy
09th Jun 2020 12:01

Sorry, Company 1 was the purchaser.

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Replying to New To Accountancy:
paddle steamer
By DJKL
09th Jun 2020 12:10

Still lost

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Replying to DJKL:
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By New To Accountancy
09th Jun 2020 12:21

Ok, I won't edit my initial post,

Company 1 purchased company 2 for £1m, high net worth clients included in sale.

Company 2 set up new company, BUT in sons name.

Clients included in sale to company 1, transferred to company 2, slowly but surely.

Company 1 went bust.

That's all I know, my intention was to throw in a food for thought, so that when legal advice is taken, all possibilities are discussed.

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Replying to New To Accountancy:
paddle steamer
By DJKL
09th Jun 2020 12:54

In effect inadequate restrictions regarding activities of the seller post sale- non compete clauses etc hopefully ought to address-one for the solicitors.

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Replying to DJKL:
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By New To Accountancy
09th Jun 2020 13:04

Absolutely.

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Replying to New To Accountancy:
By Tim Vane
09th Jun 2020 13:01

New To Accountancy wrote:

Ok, I won't edit my initial post,

Company 1 purchased company 2 for £1m, high net worth clients included in sale.

Company 2 set up new company, BUT in sons name.

Clients included in sale to company 1, transferred to company 2, slowly but surely.

Company 1 went bust.

That's all I know, my intention was to throw in a food for thought, so that when legal advice is taken, all possibilities are discussed.

Should have sued the solicitors. Purchase agreement was flawed.

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Replying to Tim Vane:
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By New To Accountancy
09th Jun 2020 13:07

Agreed, hence cost being no restriction when consulting legal advice.

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Replying to New To Accountancy:
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By Amanacca
09th Jun 2020 18:35

Agreed.

FYI I wasnt looking to get the agreement done as a DIY job. My question was mainly to ignite further points here and effectively become super alert.

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