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13 November 2018
Exit plan; A wise move?; Share sale; Outstanding payments
Exit plan
Transferring sole shareholder’s company shares to son.
A small limited company (OldCo) has traded for many years and has a modest amount of money in the bank. The sole shareholder and director is planning a gradual exit over the next five to ten years.
He has now appointed his son as a director of the company. The son would like to buy 20% of the shares from his father at a fair value but cannot finance the purchase.
His plan is that:
- the son will form his own limited company (NewCo) to buy the shares;
- the OldCo shares will be sold by his father to NewCo at a fair value without any restrictions;
- NewCo will borrow some money from OldCo and this will be used to partly pay his father for the shares; ...
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