Buying an existing / trading Ltd company for the accounts

[MarillionFan]

Had a quick search and couldn't find this.

So another contractor friend of mine who has gone permie, is going to close his company down at the end of March. This would be his fourth year trading.

I on the other hand wrapped mine up a few years ago. On the original basis that I was hanging on in permie employment so I could move (ie. port my mortgage) because if I was to go back contracting I wouldn't have 3 years worth of accounts, I thought on the idea of taking over his company & then trading from that.

So it should be easy to swap directors and I could pay a nominal fee for that. Would the trading accounts be beneficial for me if I needed a mortgage if I was to go contracting?

Anyone know?

[northernladuk]

Have you checked the financial history of his business? What about the risks he's not done something right and HMRC turn up? Would you not need the proper legal paperwork to cover yourself?

[MrMarkyMark]

So it should be easy to swap directors and I could pay a nominal fee for that. Would the trading accounts be beneficial for me if I needed a mortgage if I was to go contracting?

Interesting question.
Is there any way they could find out about the change of director / fact you bought the company?

[MarillionFan]

Have you checked the financial history of his business? What about the risks he's not done something right and HMRC turn up? Would you not need the proper legal paperwork to cover yourself?

He's a pretty much steady state kind of guy, very risk adverse and someone I've known for 15 years. You're right though, you'd probably want to check the accounts.

From an HMRC perspective, it's more likely to be around SA then the accounts itself. If the CORP tax and VAT is squared away (he's flat rate), then the only issue would be around his personal tax.

[Waldorf]

Avoid like the plague, you could be taking on a pile of crap and liabilities.

[VectraMan]

Interesting question.
Is there any way they could find out about the change of director / fact you bought the company?

They can from Companies House.

[AtW]

Avoid like the plague, you could be taking on a pile of crap and liabilities.

+1

Proper due diligence on a company isn't cheap.

[pr1]

Are you all trolling? Of course you can't just buy a company and use its accounts for your mortgage

Accounts for last 3 years will show someone that isn't you as the director, and won't mention you by name anywhere on them
Company bank statements will show all sal/dividends going to an account that isn't yours
Companies house will show change in director and shareholdings on XX date, so they'll know everything before that had nothing to do with you

You can secure a mortgage through a broker without full year accounts if you have a contract with a reasonable period left on it

[LucidDementia]

Are you all trolling? Of course you can't just buy a company and use its accounts for your mortgage

What absolute nonsense. Depends entirely what company he buys.

[MrMarkyMark]

Are you all trolling? Of course you can't just buy a company and use its accounts for your mortgage

Absolute drivel

Please hush up, the adults are talking, there's a good boy