Not For Profit -can they be bought

madbadrob

I have today been offered the chance to purchase a not for profit limited company however I have been told by a couple of people that these businesses are not technically owned and therefore cannot be sold and bought. I know if assets are sold the money has to be placed back into the company. Can someone clarify the legalities behind buying and selling such please.

Rob

Savvy_Sue

No .... As with all company purchases, make sure you get good advice (ie paid for) from an accountant and solicitor! I know you can't, over the weekend, so maybe someone else will know more, but it sounds confusing, what exactly is the company's legal structure and what is its aim if not to make a profit?

LittleVoice

madbadrob wrote: »

I have today been offered the chance to purchase a not for profit limited company however I have been told by a couple of people that these businesses are not technically owned and therefore cannot be sold and bought. I know if assets are sold the money has to be placed back into the company. Can someone clarify the legalities behind buying and selling such please.

Rob

Is it a company limited by guarantee rather than limited by shares?

Why do you want it? What is it set up to do?

In the UK there isn't actually a "not for profit" category of company.

antrobus

madbadrob wrote: »

I have today been offered the chance to purchase a not for profit limited company however I have been told by a couple of people that these businesses are not technically owned and therefore cannot be sold and bought. I know if assets are sold the money has to be placed back into the company. Can someone clarify the legalities behind buying and selling such please.

Rob

I would guess that you are talking about a Community Interest Company (CIC).

The official guidance can be found here:
http://www.bis.gov.uk/cicregulator/guidance

As far as I'm aware a CIC is just a normal company with added knobs attached. It's perfectly possible therefore for someone to own the share capital of a CIC and to transfer the ownership of that capital to someone else. Indeed by definition, since the CIC is (potentially) immortal and its shareholders are not, ownership is bound to change at some point.

The question would be why would you buy it? Or why would you buy it for anything more than a nominal sum?

Are you talking about some kind of situation where the ownership of the CIC gives you the power to employ yourself to run the CIC and therefore derive an income form it?

madbadrob

Thx for the replies and having looked into this further I am not prepared to take the gamble based on the figures I have seen.

Rob