Buying a dormant company in the UK involves several steps to ensure the process is legally compliant and smooth. Here's a comprehensive guide to help you through the process:
1. Conduct Due Diligence
Review Company Information:
- Check Company Records: Verify the company’s status on Companies House to ensure it is indeed dormant and has no outstanding liabilities.
- Financial Statements: Review the company's financial statements and any annual returns to ensure there are no hidden issues.
- Legal Compliance: Confirm that the company has complied with all necessary legal filings and requirements.
2. Agree on Terms with the Seller
Price and Payment:
- Negotiate the Price: Agree on a fair price for the company, considering it is dormant.
- Payment Terms: Decide on the payment method and terms.
Transfer of Ownership:
- Share Transfer Agreement: Draft a share transfer agreement outlining the terms of the sale.
- Directors and Shareholders: Ensure both parties agree on changes to the company’s directors and shareholders.
3. Prepare the Necessary Documents
Share Transfer Form (Form J30):
- Fill Out Form J30: This form is used to transfer shares from the seller to the buyer.
- Signatures: Both parties need to sign the form.
Stock Transfer Form:
- Complete the Form: Fill out the stock transfer form with details of the transfer.
- Stamp Duty: Check if stamp duty is payable (generally for transactions over £1,000).
4. Notify Companies House
Update Company Records:
- File Changes: File relevant forms with Companies House to update the company’s officers and registered office address, if necessary.
- AP01: For the appointment of a new director.
- TM01: For the termination of a director’s appointment.
- AD01: For changing the registered office address.
5. Update Company Registers
Register of Members:
- Update the Register: Record the change in ownership in the company’s register of members.
Other Registers:
- Directors and Secretaries: Ensure the registers of directors and secretaries are updated.
6. Inform HMRC
Corporation Tax:
- Inform HMRC: Notify HMRC of the change in ownership if the company is likely to become active.
VAT and PAYE:
- Update Details: If the company is VAT registered or has a PAYE scheme, update HMRC with the new ownership details.
7. Legal and Professional Advice
Solicitor:
- Consult a Solicitor: Engage a solicitor to ensure all legal aspects are covered and to assist with drafting and reviewing documents.
Accountant:
- Consult an Accountant: Seek advice from an accountant, especially if the company will be trading again, to understand tax implications and other financial matters.
Summary Checklist
- Conduct Due Diligence
- Agree on Terms with the Seller
- Prepare Share Transfer Form (J30) and Stock Transfer Form
- Notify Companies House of Changes
- Update Company Registers
- Inform HMRC
- Seek Legal and Professional Advice
Following these steps will help ensure a smooth transfer of ownership of a dormant company.