Share Capital transfer to new owner

[170872]

Hi All,

If a restaurant Ltd company with 2 shareholders (directors) each holding 75,000 shares sells the trade and a new owners (2) people takes over. How about the shares ? Is the shares transfer straighforward by changing details on companies house?
Or application to HMRC is required to notify the shareholdings.

On the other hand there is also a goodwill of £30K in the accounts which not amortize since created. What will happen to this.

Thanks

[LozaACCS]

It is straightforward, a stock transfer form needs to be completed and the transfer of shares recorded when filing the annual return at companies house, there will be stamp duty on the transfer.
The legal issues are more complex, the purchasers may (should) seek warranties and indemnities against liabilities arising after the sale.
The tax issues are also more complex, the vendors are liable to CGT on the gain, ie proceeds less original cost of the shares, entrepreneurs relief may be available.
The company accounts should be reviewed to determine whether the goodwill needs to be revalued in the context of the sale proceeds, ie if the proceeds exceed the current value of goodwill in the balance sheet then the excess should be reflected in the company accounts.

[Jen22]

If it is the company which is being sold (ie. the shares) rather than the trade, there should be no impact on the goodwill. It is not the company which is receiving the proceeds of sale, it is the previous owners/shareholders.

[LozaACCS]

The goodwill matters because any future transactions between the company and the shareholders will be between connected persons (S286 TCGA 1992), and so must be treated as being at market value.
So, if for example goodwill is currently sitting in the balance sheet at say 30K and the amount paid for the share(s) is say 60K, how would you uphold a position that the assets of the business are worth only 30K, the evidence would be that they are worth at least 60K.

[Jen22]

Goodwill doesn't reflect the net assets of the company - it forms part of the net assets. If you pay £60k for the shares and the company has net assets of say £80k, that would be an indicator that the goodwill is impaired. But you would never uplift the goodwill to reflect the purchase price - it arose as a result of a previous transaction, and is just one of the assets of the company which is included in the sale.

If this is just a sale of shares, there is no transaction between the company and the shareholders. If it's a trade sale, there might be a different answer. The original post refers to both a trade sale and a share transfer, so I'm not sure.