Assist you in buying the business back out of insolvency from an Administrator/Liquidator
The things to consider are:
- Standard Insolvency terms
An Administrator/Liquidator will not give any warranties or indemnities and it is for the purchaser to make their own enquiries and conduct their own due diligence.
- Re-use of Company Name
If the buyer has previously been involved in the management of the insolvent business there may be restrictions on the buyer’s ability to re-use the old company name.
- Transfer of Undertakings (TUPE)
TUPE aims to ensure that the rights of employees are protected when a business is sold. The effects of TUPE can be restricted in an insolvency sale but there are differences between Administration and Liquidation. The law in this area is complex and constantly changing so tread carefully and take advice.
- Is VAT payable?
This depends on whether you are buying assets or a going concern, the nature of the assets and whether you are VAT registered yourself.
- Can I use the trading premises?
If the seller operates from leased premises you need to know whether you will be allowed to continue to trade from there. Will the Landlord consent to your occupation and on what terms?
- Pre-pack Sales
These are sales negotiated, often before the formal insolvency, and completed within days of the appointment.
These sales can be controversial as they are often to connected parties. There have been recent changes and proposed future changes to the way pre-packs are dealt with and how Administrators have to report to creditors.
If you are involved with a pre-pack and have concerns please contact me or call me on 07778 999883.
There are many things to consider when buying assets from an Insolvency Practitioner/Liquidator/Administrator.If you would like my help to negotiate the terms of sale or whether it is possible to pay by instalments please contact me or call me on 07778 999883.