A friend has been offered the opportunity to buy a sole trader's business as they wish to retire. It's a small service business with 2 employees. There is a nominal amount being discussed for "buying" the business along with a separate small amount for existing equipment used in the course of the business, so not huge amounts of money involved. However, the 2 employees have about 20 years of employment with the sole trader's business between them and the main concern is what responsibility the new owner would have in relation to the employees, particularly with regard to redundancy payments if the new owner needs to close the business in the future.
I'm far from knowledgeable in this area so may not even be asking the right questions but advice on the following would be appreciated, or anything else that needs consideration!
Many thanks.
I'm far from knowledgeable in this area so may not even be asking the right questions but advice on the following would be appreciated, or anything else that needs consideration!
- Is the new owner liable for redundancy payments to employees from their original date of employment with the business or only from when they take over the business.
- Assuming the redundancy liability carries forward to the new owner, what sort of money should be allowed for per year of employment?
- Does any outstanding redundancy liability count as a "debt" that moves with the business for the purposes of valuing the business?
- If the previous owner hasn't been 100% compliant with paying PRSI etc. for employees does any underpayment, non-payment due then pass to the new owner?
Many thanks.