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Management Purchase of Business

Following the collapse of a local business, EQ were approached by two of the management team who sought to make an acquisition of some of the assets along with preserving the jobs of seven valuable employees. Understanding the sensitivity of the situation, EQ worked with the management team to secure funding for this purchase and to ensure that full tax relief was available.

How we helped our client

First of all, the purchaser needed to decide on its business structure and, for risk and tax purposes, a company was felt to be the best option, although the protection of assets was further enhanced by the use of a holding company.

Our Transaction Tax team then worked with the directors to secure funding for the purchase of these assets and to set up a share structure to give huge incentives for the employees to make the venture a success. Negotiations were held with the liquidators of the former company and a fair value was agreed.

Finally, we assisted in securing outside investment for the company in order for it to have sufficient capital to grow and helped to ensure that these investments were made tax efficiently by the investors under the Enterprise Investment Scheme (EIS). The company now employs 16 people and is going from strength to strength with a fully engaged and incentivised workforce.

For more information or to discuss further, please contact our Transaction Tax team.

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