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Buying existing business and investing 200 K

Only for UK Tier 1 (Entrepreneur) points system. This route is now closed to new applicants.

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Pakistan1
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Posts: 15
Joined: Sat Oct 03, 2015 1:36 pm

Buying existing business and investing 200 K

Post by Pakistan1 » Wed Nov 25, 2015 2:52 pm

Hi every one,

Good evening every one. I have a very simple but lit tricky question. Its gona help many frnds, so plz all gurus to offer comments at the earliest.

We all understand that as per HO, entrepreneur if buys a existing business and pays the purchase amount to the previous owner, that money will not be counted as investment in the business. Just to elaborate, if i buy a frenchize of Spar store, which is showing approx 20-24 K sale a month. As per practice, i shall be ready to pay "Good Will" of aprox 160 to 200 k (weekly sale x 10 = Good will). Now i transferred 200 k from my home country to Uk based bank in my business account and transferred 170 K to the account of previous owner. In return, he handed me over fol stuff/equipment:-

- All racks, computers, chilleres approx value 80 k
- Pure Good will aprox 90 K
- Remember price of present stock ll be paid on top of it after stock taking.

(As per the instructions of HQ, above mentioned payment has not gone in to business so cant be counted as your investment, so i need to arrange 170 in addition to already arranged funds of 200 k. ALTHOUGH SOME PPL SUGGEST FEW SHORTCUTS BUT LETS STICK TO THE HOME OFFICE GUIDANCE)

Question:- If, after all, I decide to pump additional 170 k in to this business, is it necessary THAT :-
a. I SHOULD IMMEDIATELY ARRANGE ADDL 170 K FROM MY HOME COUNTRY TO
COMPLETE/ TOP UP 200 K IN MY BUSINESS ACCOUNT?
b. Or i can pay 170 to the previous owner, spend bal 30 k into business and keep
transferring 10 k ,20 k etc from my home country and genuinely invest extra 170
INTO my business but in next 1-2 years till extension date becomes due?
Its a very relevant issue, pl indicate the actual connotation of the guide lines of HO.

GURUS CAN SUGGEST SOME GOOD OPTION IN THIS TYPICAL SITUATION AS WELL.

God bless,
Pakistan one

Tier1newbie
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Posts: 46
Joined: Wed Nov 25, 2015 9:58 am

Re: Buying existing business and investing 200 K

Post by Tier1newbie » Thu Nov 26, 2015 10:33 am

Not a guru here, but from what i understand the amount that you pay to the owner is not counted, even if you are deriving x amount of goodwill from it.
According to the guidance, you get a total of 3 yrs i.e till your extension to invest the money in the UK but when you apply for tier 1 that money should be there in you account. Now keeping this point in mind if you mention with your application that 170K is going to the owner then i suppose they would like to see these funds additional to the 200K that you are going to invest in your account at the time of applying for the visa. I guess they will question as to where you will get 170K to invest in the business if you are paying this amount to the owner which is not counted towards your investment. This is my understanding from all that i have read in the guidance someone else might be able to shed more light on this possibly.

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