How much to take on a limited company name?

Autumn_Leaves

Hello, 
My partner and his son have bought a butchers business and would like to take on the limited company name as it goes with the street name. How much should it cost to buy from the old owner?
Thanks.

Grumpy_chap

If you purchased the butchers as a going concern, but not the Ltd Co with past liabilities, agreeing the ownership of the name should have been part of the acquisition.  What do your professional advisors say?

Autumn_Leaves

Hi, Thank you for commenting. We couldn't take on the name at the time as there were outstanding costs associated  with it. These have since been cleared. Our accountant mentioned it would be about £200 to buy and now the old owner seems to think £2000 is a good buy. We can of course go and buy a limited company for a tiny amount so that is what we might do so I was hoping someone else had some experience of this.

Sandtree

You need to be clear what it is you actually want...

A limited company is a legal entity in its own right and can have debts, own property etc. If you buy the company itself, which actually means you buy all the shares of the company, then alls its debts and assets come with it including the goodwill of the name. What is a fair price for a company depends heavily on both the tangible and intangible assets and liabilities. If you want to continue any "trading since 1990" type claim then this enables it too. Any number stated here will be plucking a number from the air.

Alternatively you can set up a new company (not "buy one") and buy the name of the old company rather than the company itself then use that old name on the new company. This way you dont get any of the tangible assets nor any debts etc but you may hope that the goodwill will transfer to you but you lose any claim to have been trading since 1990.

I do wonder how much goodwill a butcher's shop really has though in name alone... Depending on the name above the door you can potentially set up a new company with a new name but use the signage as a trading style. 

There are potentially secondary considerations like domain names which could be an independent issue if the company itself wasnt the one leasing the domain.

martindow

What do you see as the advantage of buying this Ltd Co?  Talking to an accountant about this looks like the first step particularly as you are considering paying money for it.  Being able to continue to use the name on the shopfront is not dependant on having the name in the form of a company, is it?

If you do decide to do this might it be simpler to start a new company with a slightly different name that still ties in with your name on the high street?  I'm sure this will be cheaper than £2k,

Pennywise

Sounds like the old company owner would change the name to something else, to "release" the name so that the new owner can nip onto Companies House and form a new company with that newly released name.  That's how it's worked with a few of my clients who've wanted a name of an existing company.  Obviously needs to get the timing right in case some random person decides to form a company with that name at exactly the same time!
As others have said, very easy to think of a very slightly different name the OP could use instead, i.e. instead of "Westgate Butchers Limited", you'd form a new company "Westgate Butchers (Margate) Limited" - the name above the shop doesn't have to be exactly the same - it could remain "Westgate Butchers".
But the company name should really have been part and parcel of the business sale agreement during initial negotiations - pretty poor of the solicitors involved to overlook it really.

Autumn_Leaves

Hello everyone,
Thank you so much for all your really great thoughts and responses as we have more options than I thought. The issue is that the butchers is named after the street, Queen Street and there was some hassle to be able to use this name. There are no debts with the company or assets anymore as that's all been transferred over. It's just a case of what the old owner wants. As we can get a company for very little, we may just go down the change the name slightly route and the name over the front would remain the same.

Once again, thank you for all your advice and thoughts as it's much appreciated.  Best wishes.

J_B

Just curious as to why you need to be a Ltd Co?

Everyone knows that there's a butcher's on Queen Street, but you can simply call it Autumn Leaves Butchers - not sure that the name matters .... does it?

Thrugelmir

If maintaining the name would be of commercial benefit. Then negotiate hard with the old owner. Worthless to them now. 

Mickey666

Not worthless to them at all if someone wants to buy it    
How would you suggest 'negotiating hard' when you have nothing to negotiate with except giving them money?

p00hsticks

Mickey666 said:

How would you suggest 'negotiating hard' when you have nothing to negotiate with except giving them money?

Demonstrate to them exactly how little it costs to buy an 'off the shelf' company with a name so close to the old one that the man in the street wouldn't notice it's changed and then offer them £10 more for the one they already have ?