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Purchasing a loss making business

5 October 2017

Purchasing a loss making business

''I wonder if you are able to assist. I am looking to purchase a loss making company (£1.3m historial debts) and in order to achieve the turnaround strategy, I *think* I will need to liquidate the company. In essence I need to relieve the business of some difficult contracts, such as: - (possibly) some staff - premises lease - contract car lease(s). The remainder of the assets, liabilities etc I will want to take with us to a new company. Perhaps liquidating the business is a bit drastic? Perhaps you can help? I am looking for some advice as to whether this is a legal and appropriate approach and to work with someone through the liquidation process (if appropriate). ''

Keith's response: 

Yes it is all legal, eminently sensible and there are at least three ways to do this. It just depends on your objectives, the vendor's objectives, any secured lenders requirements and the best tool for the job can be found below. 

1. One way requires little or no cash to buy the business, freezes debts, and leverages tax and VAT for 6-10 weeks... enter the company into CVA. It means that some future profits are used to pay off creditors. There is no noise of administration or liquidation and you can leverage creditors monies without risking your own. See guides here

2. The second is Administration pre-packaged sale. Here the company is put into admin having lined up an agreed purchaser (you). See guide here and click guide to pre-pack flowchart 

3. The third is acquire the company then liquidate it having hived down the assets to a new clean subsidiary. See this page for brief guide.

I am happy to talk to you about the processes but perhaps an overview of the target would give us a better steer. We do not charge for initial advice or meetings so I suggest you give me a call on 07974 086779 to describe your objectives for the business in more detail? I will need to know the debt structure (secured, tax and VAT and trade) the sector and your plans. You can keep it confidential for now if you wish. 

If we both believe a meeting is appropriate we do not charge for the initial meeting. If we are appointed it is against a written agreement as to cost. 

I look forward to hearing from you. 

"KSA Group which owns this site, will help you fix problems in your business. We won't charge for any initial advice or face to face meetings. We speak in English. We will save you money and your precious time.  You can come to any of our offices

"We also follow up any meeting with a full "solutions report" which runs on average to 13 pages valuable free advice!!  No other practitioner offers this service.  In this report we advise on ALL the options and explain them clearly.  We advise on a course of action given the information you have given us ( the more information we have the better we can advise!)"

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