Buying fittings, fixtures and equipment and taking over a current lease agreement

[MaroG]

Dear all,

I am currently on Tier 1 (200K) category visa. I already have a limited company operating a childcare setting. I currently have a found a really good location to expand to another site, however it is occupied by a lady who want to shutdown her company and retire. I am currently going to invest £140k into my current company in form of DL. Then I am going to use £40k to buy the current equipment in the premises as it would be cheaper than buying new ones and she got already all we need. Then spend £30k for taking over current lease agreement. Then pay £25k for the lady as a wage to train my new staff and help with setting up our new system of paper work. £20k to be paid for the premises owner for 2 month rent deposit and 4 month rent in advance. Rest of the money will be spent on marketing and solicitor fees.

I just want to make sure that all of the money I will be investing will be accepted by the HO to avoid problems later on when I apply for extension.

I will appreciate all of your thoughts on this matter and please feel free to post any further suggestions.

[marcnath]

Anything going to previous owner would be a problem. The wages paid might be arguable if it is in line with salary levels.
So 40 k is definitely a problem. If the 30k is going to the previous owner that will also be unacceptable

[MaroG]

Thank you for your reply. The £30k will be going to the owner for her to let me take the current lease agreement under my company's name. Is it still not acceptable ?

I thought the £40k might not be accepted by I thought money paid for the lease would be.

[marcnath]

Thank you for your reply. The £30k will be going to the owner for her to let me take the current lease agreement under my company's name. Is it still not acceptable ?

I thought the £40k might not be accepted by I thought money paid for the lease would be.

There is something I am not clear from your post.

Are you taking over this lady's business or are you just buying the lease, furniture, etc. ?

If it is the latter, there should be no issues for any of the money.

[MaroG]

Basically the lady has a company there but she is shutting it down. So I am not buying the company's shares or the goodwill even staff I am hiring my own staff.

So money paid to the lady is for fittings, fixtures, equipment and buying the lease she has in place under my company's name. The equipment she has are in good condition and would be much cheaper to buy it from her rather than getting new equipment. Will this be an acceptable form if investment by the HO. Many thanks for your help.

[marcnath]

Basically the lady has a company there but she is shutting it down. So I am not buying the company's shares or the goodwill even staff I am hiring my own staff.

So money paid to the lady is for fittings, fixtures, equipment and buying the lease she has in place under my company's name. The equipment she has are in good condition and would be much cheaper to buy it from her rather than getting new equipment. Will this be an acceptable form if investment by the HO. Many thanks for your help.

Yes, I think that should be ok in that case. You are only purchasing from another business, not buying the business itself.

There is no reason for HO to even know the details. You could be buying it from any other business

[MaroG]

Thank you marcnath I really appreciate. One last question should the money be paid to the company before it shutsdown or can it be paid to the lady's own personal account, or it doesnt make a difference.

Also the current lease is in her company's name not in her personal name so also the money paid for tsking the lease should it be paid for the company or the lady or doesnt make a difference.

[marcnath]

Thank you marcnath I really appreciate. One last question should the money be paid to the company before it shutsdown or can it be paid to the lady's own personal account, or it doesnt make a difference.

Also the current lease is in her company's name not in her personal name so also the money paid for tsking the lease should it be paid for the company or the lady or doesnt make a difference.

Shouldn’t matter but if there are queries, it is possibly easier to justify a business to business transaction if the payments are made to the company rather than to the lady

[MaroG]

Thank you for you input. I want to also clarify one point so I dont need to provide HO with the contract for buying the equipment and the lease or any other invoices from for my Marketing or legal expenses. Do they only check the transactions from your statements and check your DL agreement and thats it ?

[marcnath]

Thank you for you input. I want to also clarify one point so I dont need to provide HO with the contract for buying the equipment and the lease or any other invoices from for my Marketing or legal expenses. Do they only check the transactions from your statements and check your DL agreement and thats it ?

Investment transactions, DL agreement and certified accounts are the only evidence you need to submit.

HO can always ask you for any further information and you will need to submit it if requested.