Those people thinking of starting a new business are often faced by a number of choices and decisions to make. Which is the best business model for your business? Where are you going to get finance from? How can you grow and expand your business? There’s a lot to think about. One question you might be asking yourself is “Is it better to start a new company or buy an old one?” – this is a question which could have two meanings. Perhaps some that you haven’t thought about.
Your Own Limited Company
As a Company Formation agent you might think we’re bias in saying that starting a limited company is the best way to go with your business, but the truth is, we’ve done our research and thousands of people in the UK agree with us. The advantages of limited companies make them the best business model for running a successful enterprise in the UK. They’re tax efficient, secure and offer the best protection to the business owner. Yet starting your own company is not without its risks. You’ll have to put in the hours to ensure that your business survives and turns a healthy profit.
Is there another option?
Yes. Of course there are other alternatives to company formation. You could choose to acquire someone else’s business. You might find someone who is looking to sell an already established business for whatever reason – perhaps they are retiring or maybe they’re struggling to keep the business afloat and you think you could do better. Whatever the reasons there are obvious advantages and disadvantages to taking over someone else’s company. But have you thought about vintage companies?
What Is a Vintage Company?
A vintage company is a company which has already been registered with Companies House for a certain period of time. It might not have been trading, it might have never been used, but it is legally compliant – with annual returns and company accounts being filed appropriately each year. Sometimes it can be preferable and beneficial to purchase a vintage company rather than starting a new company via a company formation.
What Are The Benefits Of a Vintage Company?
The benefits of taking on a vintage company are similar to those you’d expect from buying someone else’s business with less of the disadvantages.
- Company Age – a vintage company has necessarily been registered for a certain period of time. This has several benefits in itself:
o Trustworthiness – an older company is seen as more trustworthy. The longer a business has been around, the more people (suppliers, customers or other businesses) are likely to want to deal with it. A company will put its first registered date on its website, stationery and correspondence. The disadvantage here is a vintage company will not be known in the same way as a business which has actually been trading. Still the registration date will give some added appeal.
o Creditworthiness – another benefit of the age of vintage companies is the apparent creditworthiness and investment appeal. Financiers are far less likely to want to invest money in brand new limited companies while a vintage company with healthy accounts over a number of months or years is much more likely to receive investment.
o Established Security – vintage companies are already registered with Companies House. If you can find one with a name that you think is appropriate for your business then you won’t need to worry about the name being rejected like you might when carrying out a company formation. You can also be sure that no one else will object to the company name as it has already been on the register for some period of time. Of course you apply to change the company name if you so wish if it does not fit with the feel of your business.
- Legal Compliance – if you purchase someone else’s business you never know (without thorough investigation) what you are getting into. They might have bad accounts, periods of no filing, bad debt and worse. It’s risky. Yet buying a vintage company you know that the accounts have been submitted correctly and because in most case they have never traded, there is no danger of bad debt.
- Speed of Setup – because a vintage company is already registered, it’s just a case of transferring the company into your name. Saving you the hassle and worry of carrying out a company formation to start a brand new company.
As you can see, using a vintage company may be a good way to get your business started; setting off on a strong footing is never a bad thing. If you’re interested in using a vintage company see the page on our website for more information or speak to our specialist team on 0800 0828 727.
Of course you can always start a new company instead if you so choose. Free company formation is available to keep your initial start-up costs down and help you get off to a flying start!
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