MBOs are usually only undertaken once by management teams and as such, the transaction is generally a new experience for the people involved. Therefore, many of the issues that will concern the MBO team are new. These can include how much money they will have to contribute, the giving of personal guarantees, the value of the company and issues in the event of something going wrong.

We can advise and help clients implement a seamless process and avoid some of the more regular pitfalls that can occur with a management buyout. Even more importantly, we provide a constant sounding board throughout the process, providing comfort in an unfamiliar world.

Employees and shares

The Revenue has a very complex set of rules regarding shares issues to employees (as happens in all MBO’s and some acquisitions). These have been introduced over the years to tackle the avoidance schemes undertaken by “city brokers” and pick up any shares issued to employers at a discount and any restrictions of the shares being issued, including variations on common shareholders’ agreement provisions.

If the complexity of these rules wasn't enough, there has been a definite lack of specific advice on their application by HMRC. Complying with these rules from HMRC, whilst saving tax, is a difficult balancing act and one that, unlike many other smaller accountancy firms, we are experienced at handling.

We have one of the largest tax teams in the region and regularly deal with most of the problems arising from transactions. This means that we can provide an immediate response with the best advice to minimise tax liabilities, both now and into the future.

If you would like a copy of our Guide to Management Buy Outs, please email cf@francisclark.co.uk