When someone connected to the business wants to buy its assets
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An offer from someone connected to the business can feel simpler than an outside sale because everyone already knows one another. That familiarity is a reason to make the proposed terms and relationships explicit, not to bypass advice.
Give the solicitor and accountant a transaction brief before treating the arrangement as agreed. If financial difficulty is involved, obtain appropriate insolvency advice as well.
Put the relationship beside the proposal
Identify the proposed buyer, their connection to the business or its decision-makers, the assets involved and the suggested terms. State who benefits and who has participated in the discussion.
For directors, the Insolvency Service's general duties guidance addresses conflicts and interests in transactions. Ask the adviser how the actual circumstances should be handled, including required approvals and evidence. This article does not define the full legal meaning of a connected party.
The authority map should show who can make the relevant decision through the established process. A person proposing to buy an asset should not be treated as the sole source of the approval question.
Explain how the terms arose
Record the proposed price or other consideration, timing, conditions and available valuation evidence. If a figure is informal, say so. Do not invent a valuation or assume a family discount is automatically permissible.
A fictional director's relative offers to take several machines in exchange for clearing part of the site. The brief needs to identify both the assets and the proposed service, including how the terms would be assessed. Describing the arrangement only as "family helping with clearance" would conceal the transaction advisers need to examine.
The financial uncertainty guide becomes especially relevant if obligations may not be met. Do not promise a connected person priority over other claims or transactions without the appropriate advice.
Keep alternatives and decisions traceable
Ask advisers what independent evidence or comparison they need. Record the options considered and the basis for the eventual authorised decision. Preserve any conditions instead of reducing a qualified response to "the accountant said yes".
Advice assumptions should stay attached to the relevant proposal version. If the terms or parties change, obtain the necessary review of the changed facts.
Tell UK Auction Group about any proposed exclusions or competing arrangements that affect the disposal scope. An asset should not be described as available to the auctioneer while separately promised to a connected person. Resolve the proposal through the proper advice and authority route, then communicate the actual confirmed instruction.
Explore advisers and sale authority.
Sources
This guide is general information and education only. Legal, tax, employment and safety decisions may need a qualified adviser who knows your situation. Read the disclaimer.