Everyone at TMJ Legal Services is extremely proud to confirm that we have retained our Lexcel accreditation for another year.
The Lexcel Legal Practice Quality Mark is an independent accreditation awarded by The Law Society of England and Wales which recognises excellence within legal practices, and retaining our accreditation required the firm to pass a rigorous inspection. We received excellent feedback from the audit.
Lexcel accreditation recognises not just the quality of the work which our Solicitors carry out, but that of our whole team of staff. The Directors would like to take this opportunity to thank all staff members of TMJ Legal Services for their hard work and their commitment to high standards of client care.
A business can have lots of different forms, and business owners can have wide varying wishes when they come to sell their business. Business owners must have an understanding of the law and the procedure required when it is time to sell a business.
The procedure for selling a business varies significantly whether one is carrying on business as a sole trader or a limited company. Most business owners are well-versed in the concept that a limited company is its own “Legal Person” and this can be very attractive because it is the company that is liable to its own debts, and not the individuals, as is the case with sole traders.
To set up their business, sole traders can, in a roundabout way, start trading straight away. However, a company must be incorporated and appoint people to the necessary positions, which can be time consuming without the right help. The directors manage the company day to day, and the shareholders own the company. For smaller companies, these are often the same people.
Now the scene is set, lets skip to the end of the cycle and look at what happens when a limited company is sold, and what happens when a sole trander sells their business.
Two individuals have found buyers for their respective kitchen and bathroom businesses. One is a limited company (sole director and 100% shareholder - we will call her Mrs Limited Company) and the other is a sole trader - Mr Sole Trader.
Both businesses are made up of the following:
When Mr Sole Trader sells his business. everything listed will pass from them to the buyer. Of course, the employees will have to be transferred appropriately to the new owner, because there are provisions that employees and their contracts should not be unfairly altered. Specifically, employees should remain with the business on the same terms. If not, they may have a claim for constructive dismissal if they choose to leave, or unfair dismissal if they are not kept on. Any changes that must be made should be sent to the employee in writing, such as holiday/sickness changes and pension alterations (see more from TUPE 2006).
Once everything is agreed and the asset purchase agreement is drafted, the parties can complete the transaction, and Mr Sole Trader can move on.
Mrs Limited Company has two options. She is the owner of the limited company as 100% shareholder and can therefore:
Mrs Limited Company may want to retain the company name and branch out into another business area. It is important to understand that the company as a “legal person” would remain with her and the process to follow would be the same as Mr Sole Trader; selling the assets and transferring the employees.
If Mrs Limited Company wanted to dispose of the company, there would be a different agreement; a share transfer agreement. The shares are bought and not the assets. By selling the shares, the assets will not move, they are all still in the company’s name, but the company has changed ownership. Similarly, the employees now do not need transferring because they have remained with their employer company. Materialistically, the leasehold property remains with the company and there will be no need to contact the landlord for permission to assign the lease, which Mr Sole Trader would have done, all leading to a quicker process.
The two routes for the company open two very different opportunities as well as procedure, which is why this knowledge is so important to a business owner.
To discuss the options for your business, get in touch with our commercial team on 01429 235 616.
Job title: Conveyancing Assistant
Salary: To be agreed
TMJ Legal Services are looking for an enthusiastic individual to assist conveyancers in the day to day administration of client files. The successful applicant will be based at the Durham office but would be expected to travel between the firms other offices if required. Previous experience of conveyancing work would be desirable. Duties will also include typing, taking telephone calls, filing and other duties as required by the conveyancers.
Full time – Monday to Friday – 9am to 5pm
Email CV and covering letter to email@example.com , apply via the Government Gateway here or by post to Helen Edwardes, Administration Manager, TMJ Legal Services, Foster House, 99 Raby Road, Hartlepool, TS24 8DT.