Acquisition of Assets by a Phoenix Company

A professional valuation is the key to having a legitimate sale of assets from one company to another.

There are various types of class of assets, which are not only the physical fixed assets held by the company.

Along with the main fixed assets of the business, you must consider:-

  • The 'value to the business'
  • Goodwill

The above are not so easy to be valued and must have careful consideration before any transaction takes place.

The physical assets of the company can be valued on two bases:-

1. Forced sale

2. Open Market

A forced sale valuation is one which places the expected realisation of the assets if there were to be an auction.

An open market valuation will in most cases provide a higher value than a forced sale.

An open market valuation places the expected realisation for the assets if it did not have to be sold quickly and instead time was available to test the market for the best price.

If a director of the old company wishes to sell the assets to a phoenix company it must be at open market valuation.

For more advice on asset sales and phoenix companies please contact us to arrange a FREE INITIAL MEETING.


Chris Parkman
Chris Parkman
BSc Hons, FABRP, MIPA, FCCA, Insolvency Practitioner

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