If the purpose is to ensure that an unwilling shareholder who wishes to end his association with the company does not sell his shares to someone who might not be acceptable to the other shareholders, the purchase will normally be regarded as benefiting the company’s trade.
Examples of unwilling shareholders are:
an outside shareholder who has provided equity finance (whether or not with the expectation of redemption or sale to the company) and who now wishes to withdraw that finance
a controlling shareholder who is retiring as a director and wishes to make way for new management
personal representatives of a deceased shareholder, where they wish to realise the value of the shares
a legatee of a deceased shareholder, where he does not wish to hold shares in the company
Assuming that the shares aren’t being bought back at Par Value, basic rate taxpayers will probably prefer dividends for any surplus where as higher rate taxpayer will want capital treatment.
Share Buy Back is complex, make sure you seek professional advice.
people over 18 who are claiming Jobseeker’s Allowance
lone parents on Income Support
people on Employment and Support Allowance in the work-related activity group
People on the scheme get expert help and advice from a business mentor who will help them to develop their business idea and write a business plan. If the business plan is approved, they are eligible for financial support payable through a weekly allowance over 26 weeks up to a total of £1,274.
As businesses grow, their needs increase. The person steering the finances needs to be someone who can take on a broad commercial role. Forecasting, IT, tax issues, insurance and back office functions – all these need to run smoothly. But a fast-growth business needs someone who can anticipate both future opportunities and potential problems.
A good financial director will help owner-managers understand which aspects of the business are the most profitable, as well as forecasting ways to exploit other opportunities. (Santander)
So what key questions should you regularly ask your FD…..
There was also a 19.2% growth in internet purchases from a year earlier, the fastest increase in four years……..
The online retail boom was very much in evidence in late 2013, with many High Street chains expanding their internet offerings, and some shops reporting record figures for the amount customers purchased online around Christmas.
In a recent AccountingWEB survey on average survey respondents said more than 80% of their customers use a smartphones or a tablet and almost all expect this number to increase over the next 12 months.
Without an online presence your business is likely to be become invisible to your customers.
Its not just about having a website either, there needs to be something that will keep your customers visiting your website and you probably need an app….
Starting a new business is always a challenge but there are some common financial mistakes that all start ups should avoid.
Lack of Planning – Businesses normally start with a great idea but you need to have business model that works and to at least have a basic business plan and cash flow.
Over Trading – this happens when a business expands too quickly for its working capital, when you start a new business its tempting to accept every order without considering whether you can have the resources and the cash to deliver.
Wasted Marketing and Advertising – new businesses are an easy target for marketing companies but its important to stick to the essentials to start with, having a website, e mail and business cards are essential, magazine advertising and other things can be done as the business grows, in the early stages you are experimenting and finding your market so if you spend too much too soon you might promote the wrong things at the wrong price.
Wrong Business Structure – Before you start your business get some advice from your accountant, its important to choose the right structure not just for tax reasons but also for investment and ownership.
Wrong Staff – Choosing the right team is critical for business success, choose staff that have the right skills, the right attitude and are dedicated to the success of the business.
Over Ambitious – All too often businesses plans are over ambitious with sales growing rapidly, often they prove to be unrealistic, when preparing a sales forecast start with your order book and be cautious in your assumptions.
Overheads – Many businesses over spend on overheads for example renting premises too early, work from home, if you can, to minimise costs.
Stock Problems – Buying the wrong stock, under or over stocking are also issues for start ups, try to adopt a ‘just in time’ stock policy.
Getting Paid – A sale is only a sale if you get paid, any one can give things away, make sure you manage your clients and get paid on time.
Competition – Keep an eye on your competitors, they will be watching you and responding to maintain their market share.
When you think about it, there are really only 3 reasons why a business owner would want to sell their business:
Sometimes the the value of your business could be over inflated, remember the dot com bubble. Throughout history there have been times when the price that a buyer is prepared to pay is huge compared to normal business valuation models.