Absolut started this topic @ 10:38 on 20/05/2006
An internet cafe/computer training facility has come onto the market for sale. I am not totally sure just what is for sale - whether it is just the assets of the business or the company & its assets but it mentions Learn Direct, computers and usual office equipment. Asking price is £50,000.
I have downloaded information from Companies House about the company and it's limited by guarantee with no share capital. I have spent ages trawling Google for information about this type of company and the only thing I can find is that in most guarantee companies its members can't profit from the sale of company assets. There are no shareholders registered at companies house but the accounts show shareholder funds. Most recent annual return says no share capital. This is most confusing 
Can a guarantee company be sold in this way?
Thanks for any help 
RE: Internet Cafe - advice needed
ecom-solution.co.uk | 22/05/2006 12:12 AM
do you have the full advert ?
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RE: Internet Cafe - advice needed
AssistGroupLimited | 22/05/2006 07:51 PM
Be very careful - I would normally recommend to my clients that they seek only to buy the "business and assets" and steer well clear of the corporate entity unless you wish pay a serious amount to accountants for a due diligence exercise. The directors will usually be permitted to sell whatever they like - ask them. If they insist on selling "the company" think very seriously about running a mile......
Ciaran
RE: Internet Cafe - advice needed
SPower | 23/05/2006 01:57 PM
I would question the sense in paying £50k for something that you could start yourself. Sure, the presence the existing business has (presumably it has been in operation for some time - 2002 according to the website) and the existing client base, but you have to value this against the asking price. Also, buying the existing presence can be a negative if the company has a poor reputation.
They operate as a not-for-profit organisation, so your only source of income from the business will be your specified draw. I would definitely seek professional advice on this one!
Just out of interest, I have heard that Learn Direct partners are mostly unhappy with the revenue they get from running the courses - it might be worth checking further.
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Sean Power
www.quadrigamotivation.co.uk
http://startup-it-security.blogspot.com/
"What I do today is important because I am exchanging a day of my life for it."
RE: RE: Internet Cafe - advice needed
Absolut | 23/05/2006 03:17 PM
Thanks for the advice and I note the point about paying £50k for something you could start yourself. I suppose they are basing their selling price on the present customers and goodwill and contracts etc.
I was under the impression that the members/directors of a company limited by guarantee with no share capital didn't own the assets and therefore couldn't sell them?
I agree about it being doubtful paying for the company name as well but the buyer would have to seeing as the Learn Direct contract is awarded to the company and not to an individual. I have also heard that the revenue from courses can be poor but I read recently that in order to address that issue Learn Direct now have 2 year contracts that are worth a minimum of £100k.
As the business is for sale bundled in with the accommodation I thought there would be more value in selling the property with the business space empty but I can also see the interest in continuing a business that has been going for some years and taking over what appears to be a lucrative Learn Direct contract. Of course, because of the high asking price for both (£275k) I agree that professional advice should be sought. I have also had a look at the paperwork lodged at Companies House and I believe the accounts are a bit dodgy (shows shareholder funds) so it would certainly appear to be worth paying for due diligence.
