Buying existing company and staff advise

Josh_Milner · 19 January 2018 at 7:04PM

Hi,

My partner is looking at purchasing a well established soft play area and cafeteria business we have currently found out the information required other than it comes with 10 members of staff. I’ve spoken with Ernest Wilson who have advertised the business regarding staff contracts at this present time they seem they don’t want to disclose any information regarding the staff.

Our main issue is we are going to be working owners and don’t think we require all the 10 members of staff but are we right in thinking if they are on zero hour contracts we can easily lay them off by basically telling them we don’t have any hours for them to work ? But if they are contracted staff to say 16 hours a week but we feel we don’t really require them how would we legally go around laying them off ?

Ernest Wilson has said they are unsure of contracts at the minute and any contracted staff will be protected through the tupo process.

Thanks

Pennywise · 19 January 2018 at 7:16PM

Josh_Milner wrote: »

Hi,

My partner is looking at purchasing a well established soft play area and cafeteria business we have currently found out the information required other than it comes with 10 members of staff. I’ve spoken with Ernest Wilson who have advertised the business regarding staff contracts at this present time they seem they don’t want to disclose any information regarding the staff.

Our main issue is we are going to be working owners and don’t think we require all the 10 members of staff but are we right in thinking if they are on zero hour contracts we can easily lay them off by basically telling them we don’t have any hours for them to work ? But if they are contracted staff to say 16 hours a week but we feel we don’t really require them how would we legally go around laying them off ?

Ernest Wilson has said they are unsure of contracts at the minute and any contracted staff will be protected through the tupo process.

Thanks

Get your accountant/solicitor involved at the earliest possible stage. You need to know your legal liabilities upon taking over the employees under TUPE. You also need advice on whether the asking price is a true value of the business. Some of the national business sales agents are notorious for grossly over-valuing businesses.

Josh_Milner · 19 January 2018 at 7:43PM

Pennywise wrote: »

Get your accountant/solicitor involved at the earliest possible stage. You need to know your legal liabilities upon taking over the employees under TUPE. You also need advice on whether the asking price is a true value of the business. Some of the national business sales agents are notorious for grossly over-valuing businesses.

Thanks Pennywise my partner is going to look at her funds and book a viewing if she likes it she’ll instruct our solicitor immediately.

Thanks

paddyrg · 19 January 2018 at 8:32PM

Before going for a look round, maybe see if you can get copies of the books. Needs to be a head, not heart decision.

00ec25 · 20 January 2018 at 11:38AM

given your apparent lack of knowledge of employment law you need to seek professional advice

how far have you got with your own researches, after all it is TUPE not tupo?

http://www.acas.org.uk/index.aspx?articleid=1655

Josh_Milner · 20 January 2018 at 12:31PM

paddyrg wrote: »

Before going for a look round, maybe see if you can get copies of the books. Needs to be a head, not heart decision.

Asked Earnest Wilson for a copy of all the up to date accounts and they won’t release them without having a viewing booked in for some strange reason but these will be passed on to my partners mother she’s a retired accountant but still pays to keep her registration as she does all the accounts for a local charity.

00ec25 wrote: »

given your apparent lack of knowledge of employment law you need to seek professional advice

how far have you got with your own researches, after all it is TUPE not tupo?

http://www.acas.org.uk/index.aspx?articleid=1655

Yes thank you for pointing this out and I’ll apologise for a slight spelling mistake! I do have knowledge on employment law but very little, my knowledge on employment comes from my current role but as we are a national company our HR department is the brains on this sort of stuff but as they are based in Manchester we do not have closer enough working relationships or I would ask them about it.. I have no knowledge at all on TUPE it’s something I’ve never dealt with.

Thanks

Pennywise · 20 January 2018 at 2:12PM

Josh_Milner wrote: »

these will be passed on to my partners mother she’s a retired accountant

OK for a quick glance, but please get a proper accountant to do due diligence. Things change very quickly, and doing the books for a charity is very different to a business. Is she up to date on the various VAT rules for example? Does she understand the current pros & cons of trading via a limited company? Unless she has recent experience in the accounts/tax/valuations involved in buying a business, she's not the person to give you advice in those areas. By all means, let her have a look to give you some general pointers, but please don't go too far without professional advice.

Josh_Milner · 22 January 2018 at 5:52PM

Pennywise wrote: »

OK for a quick glance, but please get a proper accountant to do due diligence. Things change very quickly, and doing the books for a charity is very different to a business. Is she up to date on the various VAT rules for example? Does she understand the current pros & cons of trading via a limited company? Unless she has recent experience in the accounts/tax/valuations involved in buying a business, she's not the person to give you advice in those areas. By all means, let her have a look to give you some general pointers, but please don't go too far without professional advice.

I’ve got the accounts but the most recent one hasn’t been completed as the current owner is running it as a sole trader rather than a limited company so I need to contact our solicitor again for another quote as we are trying to price up the cost to take over this establishment and he’s quoted on the price of it being a limited company.

She doesn’t and didn’t deal with small privately run businesses as before she retired she was in the NHS and did various stuff their including payroll I believe. She’s just having a look to give us some general pointers if she has any.

My partner went to the establishment over the weekend just as a paying customer just to steak it out really and said they had two young people running it probably around the age of 16/20 and they was pretty useless but I said it’s probably they don’t really give a monkeys as they will be on minimum wage but it was things like they want cleaning the tables just taking pots off them and the toilets was left grotty so hopefully not all the 10 staff will have to stay and hopefully they all will be just casual workers without contracts etc.

Thanks for all you advice, I can confirm we have a viewing next week booked in and will instruct a solicitor and an accountant before going any further with it after the viewing.

girllikeme1 · 28 February 2018 at 10:49AM

You need to check what the terms of their contracts are. Normal procedure is they go through a TUPE process and their employment rights are protected; you can find out more here: https://www.gov.uk/transfers-takeovers

Buying existing company and staff advise

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