When another business depends on your factory's services

Topic
Manufacturing site closure
Reading time
3 minutes
Last reviewed
On this page
  1. Prepare the counterparty enquiry
  2. Keep the proposed change separate from consent
  3. Define the boundary for contractors

Identify whether another business relies on services connected with the factory before agreeing how those services will change. The arrangement may involve a neighbouring occupier, a separate company on the site or another property.

Ask the relevant legal, property and technical advisers to establish the actual position. Ownership of equipment, payment of a bill and a right to alter supply are separate questions. This article does not determine any of them.

Prepare the counterparty enquiry

Gather the available agreements and records, then identify the questions each discipline must answer. Do not assume an informal arrangement has no consequences because the original contact has left.

Question Evidence or discussion needed
Who are the parties? Correct legal entities, relevant occupiers and authorised contacts
What is being provided? Actual service, known technical information and limits of current knowledge
What has been agreed? Contracts, property documents, correspondence and the adviser's interpretation
What does the other business depend on? Their current activity and the consequences they identify
What future arrangement is proposed? Responsible parties, technical assessment, agreement and timing to establish

If the other party occupies part of your premises, connect this enquiry to the subtenant or licensee review. Its occupation arrangements and service dependence may need related but separate advice.

Give the enquiry a named coordinator. They bring the right people together but do not replace professional advice or confer authority to act.

A factory's closure announcement may tell the neighbour that circumstances are changing. It does not necessarily settle the service arrangement. Record what the other party has actually confirmed and what remains a proposal.

Avoid promising a technical alternative before its feasibility and responsibilities have been assessed. A new meter, route or provider may involve matters outside the business owner's knowledge or control.

Keep the discussion within the authorised utility programme. Separate project teams should not offer different dates or assume someone else has obtained the required agreement.

Define the boundary for contractors

Include the known external dependency in the decommissioning enquiry. Ask the responsible team how it affects assessment, scope and coordination. Do not provide a removal or disconnection instruction based on the enquiry record alone.

If the arrangement remains open when production ends, put it in the continuing-responsibility handover. Name the person who owns the counterparty relationship, who can approve spending and which evidence will close the matter.

Retain the relevant records through the appropriate business process. A future adviser may need to understand both the technical boundary and what each party agreed, including changes made during the closure.

When approaching UK Auction Group about assets, explain any external dependency affecting their proposed release. Keep those items outside an unconditional availability statement until the responsible parties have resolved the applicable questions.

See the manufacturing site closure hub for related decisions.

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.

Closing a business with assets to sell?

UK Auction Group values everything on site, runs the sale and hands the premises back clear, with a full statement of proceeds at the end.

Send a list of what you have, where it is and your deadline. Decisions that are still open can be included.

Business closure auctions and site clearance Contact UK Auction Group

Business Closure Guide is part of the UK Auction Group portfolio.

Browse all guides by topic