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Question : How the funds should be invested ?

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

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jihup
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Posts: 1
Joined: Tue Aug 19, 2014 11:59 am

Question : How the funds should be invested ?

Post by jihup » Tue Aug 19, 2014 12:04 pm

i'm married Egyptian Engineer who intend to apply for Tier 1 (Entrepreneur) visa with 200000 funds.

My family has a profitable running business in sheet metal works here and i'm looking forward to use my previous experience to take over a running business in UK ( buying business form previous owner who sell it due to retirement ).

I've checked the requirements for visa and for extending it but i found a rule which make me confused
"The funds must continue to be available to you until they
are spent for the purposes of your business or businesses. ‘Available to you’ means that the
funds must be in one of the following:
(1) in your own possession,
(2) in the financial accounts of a UK incorporated business of which you are the director, or
(3) available from the third party or parties named in your application (if applicable).
‘Spent’ by your business’ excludes spending on all of the following:
(1) your own remuneration,
(2) buying the business from a previous owner, where the money goes to that previous
owner rather than into the business,
(3) investing in other businesses, and
(4) any spending which is not directly for the purpose of establishing or running your own
business or businesses. "

especially this sentence " buying the business from a previous owner, where the money goes to that previous owner rather than into the business"

Does that mean that i should start-up a new business and taking over a running business will not make me able to extend entrepreneur visa later ?

Tire1Questions
Member
Posts: 139
Joined: Fri Aug 26, 2011 8:57 pm

Re: Question : How the funds should be invested ?

Post by Tire1Questions » Tue Aug 19, 2014 4:40 pm

well, there is a way round it: Form a ltd company in UK first and transfered the funds into your new ltd company (that fulfills the requirement that the money has been invested). Then let the new ltd company to take over the business you wish to buy. ...Simple... this is what I would do. But do get other peoples/professionals opinions as well

MTZ510
Member of Standing
Posts: 312
Joined: Wed Feb 27, 2013 11:24 am
Location: Leeds, United Kingdom

Re: Question : How the funds should be invested ?

Post by MTZ510 » Tue Aug 19, 2014 5:08 pm

jihup wrote: especially this sentence " buying the business from a previous owner, where the money goes to that previous owner rather than into the business"
Does that mean that i should start-up a new business and taking over a running business will not make me able to extend entrepreneur visa later ?

Tire1Questions wrote:well, there is a way round it: Form a ltd company in UK first and transfered the funds into your new ltd company (that fulfills the requirement that the money has been invested). Then let the new ltd company to take over the business you wish to buy. ...Simple... this is what I would do. But do get other peoples/professionals opinions as well

I have asked this question a number of times but couldn't get the satisfactory answer, as most members on this forum have not gone through this process of buying a running business and few lawyers to whom i spoke to are not that sure.

The fact is that even if i start a new retail business i would need a lease hold shop and have to pay the goodwill to the existing tenant. So my understanding is one can buy a running business but first form your own company, invest money in to that company and then buy the business through your company. You can show in your accounts the payment made to the vendor as payments for buying fixtures and equipment and for the lease hold rights of the shop.

That's what i am doing rest i will know at the time of extension :)

more input from members on this subject will be highly appreciated.

@ Tier 1 Questions. What you have said is your experience or just your opinion.

Thanks
Always help others..... it always come back to you.
Even if i know the answer ... i have this habit of confirming from others..

Tire1Questions
Member
Posts: 139
Joined: Fri Aug 26, 2011 8:57 pm

Re: Question : How the funds should be invested ?

Post by Tire1Questions » Tue Aug 19, 2014 5:32 pm

This is what I think MTZ580 and from my business/accountancy understanding, this is one should do instead of buying an existing business. If you buy a business, you buy everything...its debt, responsibilities, legal cases etc. When you buy a business, you do not know (beyond accounts provided to you), whats been going on in business. You may end up with lots of surprises. So, I would not advise you to buy a business, but buy its assets...and customers/goodwill.

saeedusman
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Posts: 264
Joined: Fri Jan 15, 2010 12:06 am

Re: Question : How the funds should be invested ?

Post by saeedusman » Sat Aug 30, 2014 11:50 am

So it means:

> If we put some (lets say 30K)or all funds (200K case) into our company account and then company pay 20K to somebody for buying restaurant premises (runnig or closed down) from the owner who is self-employed (not limited company), then it will not count for investment although it is paid from company account?

BUT

> If we show that 20K is paid to the owner for fittings, fixtures and equipment buying (not mentioning the existing business or its name in the documents and show that as closed restaurant or take away), then that 20K will count in the investment? Although again that is paid to the self-employed owner via cheque or bank transfer.

Mimo2000
Newly Registered
Posts: 6
Joined: Sat Aug 30, 2014 12:14 pm

Re: Question : How the funds should be invested ?

Post by Mimo2000 » Sat Aug 30, 2014 1:05 pm

Dear
I'm Egyptian and like to shar some info. related to this issue , as am planning to go for Tire 1, if you are interesting till me to send you my contact details or send me as well.
MK

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