Family business..siblings and I are considering setting up as a limited company..

[moneyweary]

My siblings and I are considering setting up as a limited company in order to take over the running of my fathers business. He is currently self-employed in the construction industry (contractor on one-off housing). He is VAT registered and employs four people.

Can anyone give some advice or suggestions as to how we would approach this? Is it possible to take out a business loan to develop it further?

Any help greatly appreciated!

 

[MOB]

Re: Family business...

If this process involves any significant asset transfers - either by gift or sale(anything over €500k for sure, at less than this a matter for yourselves) then you should get professional advice first. This forum is just not suited to the level of detail needed.

 

[moneyweary]

Re: Family business...

Ok thanks for your reply. I just wasn't sure who to approach about it - Dads accountant isn't the most helpful by any stretch of the imagination!

There are no major physical assets (premises/vehicles) as such to be transferred. Its more the transferrance of creditor accounts and contracts with customers. I take your point, there's probably alot of detail involved.

Thanks

 

[Brendan Burgess]

Why are you taking over the business?

Is your dad retiring? Is it something that you think you can develop better than he can?

If he is a one off contractor with no assets, then it seems to me that he should probably wind down his business, collect his debts and pay off his creditors.

You can set up a limited company or carry on as a partnership and carry on the same business as he does. You can employ him if you wish. You can employ your dad's employees if you wish.

If you take over his business, you would have to take on his employees which you might not want to.

He can't just hand over his creditors to a limited company or his contracts for that matter. He should pay off his creditors and you can start dealing with the suppliers afresh. The customers may or may not be happy to hand over the contracts to a new company.

As MOB pointed out, you need to get good business advice. A lot of accountants are just not good at this. You need to speak to a good business person or to a good accountant. Change your accountant.

Brendan