Buying a Company
When buying a company there are three distinct options available:
- setting up a new company
- Purchasing a ready made or off-the shelf company
- Buying a company with the view of acquiring its trade
The latter two options (registering and buying a company for its current trade and assets) will not be detailed here. The option of purchasing a ready made company will be covered in this section.
Ready Made Company
A ready made company (which is also known as off-the-shelf) is a one which already exists. That is, it has been formed at an earlier date and is available for a purchaser can buy.
Most people wanting to purchase a limited business entity in the UK choose to set-up a brand new company, that is, one which does not exist until the time they choose to register it themselves.
Ready made companies might be very popular in specific situations however. The benefits of an off-the-shelf company can increase their appeal to certain individuals, depending on their personal objectives.
In addition, there are also different categories of off-the-shelf companies which serve specific and varying commercial purposes.
Buying a Ready Made Company
Buying a ready made company is generally more expensive than registering a new entity. Off-the-shelf companies do incur a "holding cost".
Accounts might have been prepared for the company whilst the current owner has had it in their possession. Annual returns and corporation tax returns which are required each year might also have been filed and resulting in costs to the seller.
It should be noted that ready made companies can have some disadvantages attached to them. Any specific disadvantages will depend on the individual off-the-shelf company being considered.