Help - buying a UK limited company with assets overseas???
Discussion
Help!
I am planning the purchase of a French carp fishing lake and I now need to sort out the important bit - the finance.
What I am buying is a UK limited company which owns the freehold to the land, lake and two larget houses that sit on it. The business is currently profitable but obviously makes all of its money in France.
Can anyone give me any ideas of my options? Can I look at commercial loans in the UK? or France? or should I be looking at a mortgage of sorts?
This is a first for me so any advice would be greatly appreciated.
Sam
I am planning the purchase of a French carp fishing lake and I now need to sort out the important bit - the finance.
What I am buying is a UK limited company which owns the freehold to the land, lake and two larget houses that sit on it. The business is currently profitable but obviously makes all of its money in France.
Can anyone give me any ideas of my options? Can I look at commercial loans in the UK? or France? or should I be looking at a mortgage of sorts?
This is a first for me so any advice would be greatly appreciated.
Sam
Sam
I'd buy a copy of the Estates Gazette - it's a weekly property magazine (a big newsagents will them or a big WHSmiths). Comes out every Saturday.
There's loads of adverts in the back of firms that offer commercial loans, mezzanine finance, bridging loans etc etc.
How much are you looking for? Less than a million, more than £5mill?
And what assets do you have to put up?
I'd buy a copy of the Estates Gazette - it's a weekly property magazine (a big newsagents will them or a big WHSmiths). Comes out every Saturday.
There's loads of adverts in the back of firms that offer commercial loans, mezzanine finance, bridging loans etc etc.
How much are you looking for? Less than a million, more than £5mill?
And what assets do you have to put up?
Thanks for the reply.
No we are talking about £300k.
I only have my house (which will be sold to pay for the £100k I will be plan to put into the project). Obviously once I make the purchase then there will be a lake, 17th century mill house and another large house all siting on about 12 acres of land in France.
Sam
No we are talking about £300k.
I only have my house (which will be sold to pay for the £100k I will be plan to put into the project). Obviously once I make the purchase then there will be a lake, 17th century mill house and another large house all siting on about 12 acres of land in France.
Sam
Ok. Right. 300k. That sounds like quite a feasible plan.
First things first then. go to whsmiths a couple of french property magazines. They'll be loads of stuff in there regarding mortgages.
What I'll say is (and I hope Eric Mc will back me up here) is that you have to be very careful when buying a company as opposed to a property is that you can hide stuff in a company that you couldn't with a property. By stuff I mean debt/liabilities hidden in the company.
I cannot stress this enough. You've got to do as much due diligence as possible on the company to make sure it's a) got the assets it says it does (ie the lake and two houses and 12 acres) b) that the person selling the company actually owns all of it c) that there's clean title to all of the land, houses and lake and d) that you have enough money to live out there with no income for at least 6 months. Don't forget to factor in quite punchy Estate agent fees too.
This is going to come down to your lawyer (he'd better be good), accountant (ditto) and friends of the family with experience (and PH!) guiding you through this.
And the tax position that Eric Mc refers to too. Buying a French company might lead to French business taxes (onerous no doubt) and all sorts of red-tape. Be very careful. Also you might have to factor in having to take some time out to do a govt french business course in order to be 'qualified' to run french business.
my cousin came across this problem when she tried to set up a business in Courcheval this summer.
First things first then. go to whsmiths a couple of french property magazines. They'll be loads of stuff in there regarding mortgages.
What I'll say is (and I hope Eric Mc will back me up here) is that you have to be very careful when buying a company as opposed to a property is that you can hide stuff in a company that you couldn't with a property. By stuff I mean debt/liabilities hidden in the company.
I cannot stress this enough. You've got to do as much due diligence as possible on the company to make sure it's a) got the assets it says it does (ie the lake and two houses and 12 acres) b) that the person selling the company actually owns all of it c) that there's clean title to all of the land, houses and lake and d) that you have enough money to live out there with no income for at least 6 months. Don't forget to factor in quite punchy Estate agent fees too.
This is going to come down to your lawyer (he'd better be good), accountant (ditto) and friends of the family with experience (and PH!) guiding you through this.
And the tax position that Eric Mc refers to too. Buying a French company might lead to French business taxes (onerous no doubt) and all sorts of red-tape. Be very careful. Also you might have to factor in having to take some time out to do a govt french business course in order to be 'qualified' to run french business.
my cousin came across this problem when she tried to set up a business in Courcheval this summer.
Edited by Oi_Oi_Savaloy on Thursday 24th May 13:01
Oi_Oi_Savaloy said:
Ok. Right. 300k. That sounds like quite a feasible plan.
First things first then. go to whsmiths a couple of french property magazines. They'll be loads of stuff in there regarding mortgages.
What I'll say is (and I hope Eric Mc will back me up here) is that you have to be very careful when buying a company as opposed to a property is that you can hide stuff in a company that you couldn't with a property. By stuff I mean debt/liabilities hidden in the company.
I cannot stress this enough. You've got to do as much due diligence as possible on the company to make sure it's a) got the assets it says it does (ie the lake and two houses and 12 acres) b) that the person selling the company actually owns all of it c) that there's clean title to all of the land, houses and lake and d) that you have enough money to live out there with no income for at least 6 months. Don't forget to factor in quite punchy Estate agent fees too.
This is going to come down to your lawyer (he'd better be good), accountant (ditto) and friends of the family with experience (and PH!) guiding you through this.
I couldn't agree more. Is there any reason why you cannot simply buy the assets off the company and leave them to wind up the shell? First things first then. go to whsmiths a couple of french property magazines. They'll be loads of stuff in there regarding mortgages.
What I'll say is (and I hope Eric Mc will back me up here) is that you have to be very careful when buying a company as opposed to a property is that you can hide stuff in a company that you couldn't with a property. By stuff I mean debt/liabilities hidden in the company.
I cannot stress this enough. You've got to do as much due diligence as possible on the company to make sure it's a) got the assets it says it does (ie the lake and two houses and 12 acres) b) that the person selling the company actually owns all of it c) that there's clean title to all of the land, houses and lake and d) that you have enough money to live out there with no income for at least 6 months. Don't forget to factor in quite punchy Estate agent fees too.
This is going to come down to your lawyer (he'd better be good), accountant (ditto) and friends of the family with experience (and PH!) guiding you through this.
Edited by Oi_Oi_Savaloy on Thursday 24th May 13:01
I hate buying existing companies as you can pick up some horrible liabilites that could take ages to appear.
Agree with Horse Apple comments, not so bad when buying a UK company with UK assets, however, overseas trading could lead to nasty tax implications, which you will inherit. Yes you can protect yourself with indemnities and warranties from the vendor, but you will need to enter into litigation to resolve.
You could ask for a sum to be retained for a number of years in Escrow to protect against such circumstances, but the vendor will be against this.
Please ensure you are adequately protected against such circumstances! Do you know enough about french VAT, PAYE etc etc..... and possibly other commercial matters!
You could ask for a sum to be retained for a number of years in Escrow to protect against such circumstances, but the vendor will be against this.
Please ensure you are adequately protected against such circumstances! Do you know enough about french VAT, PAYE etc etc..... and possibly other commercial matters!
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