Yes, at first sight it would (or in my case, second sight - I answered as if the debts were off balance sheet and still possibly outstanding). But do get confirmation that the debts shown in the earlier accounts have all been paid and that there are no other outstanding liabilities (including tax), whether actual or contingent, and an undertaking from the vendors to indemnify you against any outstanding debts that may materialise in the future. If they are genuine, they will give one. Actually - if you are buying a company, you should speak to a lawyer and an accountant and get a contract of sale drawn up to cover these and other points. Who knows what you could be letting yourself in for otherwise. For example a previous customer/employee might have been suing the Company for some reason, and the owners now realise that the Company will have to pay damages/legal costs sooner or later.
It doesn't matter how many other names it has had in the past, or when. Maybe it will change back to a previous name in order to free up the name you want.
-- Edited by ilsm on Friday 15th of November 2013 11:01:44 PM
I have been offered a Ltd Company with an attractive name for what I want to use it for.
It has been non trading for 4 years. Previous to this the company had net assets of minus £8,000.
A £10,000 long term liability, £2,000 current liabilities and current assets of £4,000.
All the accounts are now showing as £0 for everything for these past 4 years so is there anything I should be looking out for when acquiring this company?
Is it the name you want, or the Company's history?
Personally, I wouldn't want the Company itself unless it was a household name and had a clean 100 year history, and I'd steer well clear of one with the kind of liabilities you have outlined. At law, a debt remains enforceable for 6 years after it became payable, or from the most recent acknowledgement/admission of liability. So if you do take them on - and you will if you buy the Company - you must ask the vendors to protect you. I would want a bank guarantee that will pay out if those debts become due and payable: nothing less.
But if it's just the name you want, the procedure is simple. Agree a price with the shareholders of the company ("Oldco Ltd"). Buy/form a new company - "Newco Ltd" - which is the one you will keep and operate - pass a contingent special resolution to change Newco's name to Oldco Ltd, provided the existing Oldco changes its name to something else (or pass special resolutions consecutively to the same effect). File both resolutions at Companies House along with the appropriate forms (NM01 I think) and the fees, and then Robert is the name of your mother's brother.
(A Special Resolution must be passed by a 75% majority of the existing shareholders.)
But if it's just the name you want, the procedure is simple. Agree a price with the shareholders of the company ("Oldco Ltd"). Buy/form a new company - "Newco Ltd" - which is the one you will keep and operate - pass a contingent special resolution to change Newco's name to Oldco Ltd, provided the existing Oldco changes its name to something else (or pass special resolutions consecutively to the same effect).
Iain
Is your real name Charles Green?
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