New queries, issue 4543

Business premises

What are the implications of transferring business premises to a ‘new’ company?

We act for a client company which incorporated in May 2015. However the business premises valued at £2.5m remained within the previous partnership which ceased trading on incorporation.

The partners/directors had in mind to sell this property and purchase alternative premises. The company found a suitable site and incurred £75 000 in preliminary expenses as follows:

• Valuation fees: £8 000
• Bank loan arrangement fee: £15 000
• Professional fees (survey costs legal fees and consultancy fees): £52 000

Reluctantly the partners/directors had to accept that there was significant risk in the project and they abandoned it deferring any move until they were in a better financial position. Meanwhile they have carried out extensive work on the existing...