Purchase of Company Shares
A client company operated an IT business, and a minority shareholder was leaving the Company.
It was important that the outgoing shareholder’s stake in the business was bought off him as part of him leaving the business.
One way was for the remaining shareholders to buy the shares off the outgoing shareholder, but this would mean the remaining shareholders incurring higher rate tax bills on drawing funds from the company yo buy the shares.
Red Dot recommended the client arranges for the company to buy the shares instead. This is called a company purchase of own shares. The process is quite complex as the circumstances have to meet detailed criteria with HMRC, and the transaction requires HMRC approval.
Red Dot completed the transaction efficiently for our client.
Again, another example of how we can deliver services normally only associated with the larger accountancy firms by using our network of trusted professionals as we require them.