The short answer: should you buy the shares or the assets?
Our default for a second care business is a share purchase under a holding company. You buy the shares of the company that already holds the CQC registration, and because the legal entity never changes, the registration, the registered manager and the local authority and ICB contracts all carry on without a break. You can invoice the day you complete. We only steer an owner toward an asset purchase when the target's compliance history is poor enough that inheriting the whole company, with everything sitting in it, is the bigger risk. That is the trade you are weighing, and it is worth setting out properly because the two routes behave very differently.
The reason the share route usually wins is timing. A new company buying only the assets has to register with CQC as a new provider before it can deliver regulated care, and that is not a formality you clear in a fortnight. So the question is rarely "which is cheaper on paper", it is "can the business afford to stop billing while a new entity gets registered, and can the contracts survive the move". For most acquisitions the honest answer is no, and the share purchase protects the very things you are paying for.
This guide is written by LOYALS, a King's Cross firm of accountants and business consultants that models care acquisitions, sets up the holding company and runs the finance function afterwards for care agencies and care groups across London and the UK, so the framing here is the decision an owner actually faces, not the textbook version of it.
What actually changes when you buy the company instead of the business?
Buying the shares means you buy the whole company as it stands, good and bad. The trade carries on inside the same legal entity, so its CQC registration, its contracts, its staff, its bank facilities and its history all stay exactly where they are. Nothing has to be transferred, because from the outside nothing has moved except who owns the shares at the top. That is the appeal, and it is also the risk: you inherit the debts, the disputes, the historic PAYE position and any regulatory findings along with the good bits.
Buying the assets is the opposite. You cherry-pick what you want, the client list, the goodwill, the staff, maybe the software and the office, and you leave the old company behind with its liabilities. It sounds safer, and for a business with a messy history it can be. But a care business is not a shop. The thing that makes it worth buying, the registration and the contracts, does not simply come across with the furniture. Those attach to the legal entity, and a new entity has to earn them again. Sellers usually run their part of a deal through a specialist care accountant for exactly this reason, so the structure is agreed before heads of terms are signed.
The five questions in the flow below decide which route fits your deal.
Read it from the top. If the seller's CQC record and finances are clean enough to take on, and the contracts continue on a share sale, the share purchase is almost always the right call. Only a genuinely bad history, the kind that would follow the company around, tips the balance toward buying the assets and starting a fresh registration on purpose.
Will you have to register with CQC again?
On a share purchase, no. The registered provider is the company, and the company has not changed, so its registration simply continues under new ownership. On an asset purchase, yes, and this is the point that catches owners out. When the business moves to a different legal entity, CQC treats the incoming entity as a new provider that must apply again before it can lawfully deliver care, even at the same address with the same staff and the same manager. CQC's own guidance on changing your registered legal entity is clear that the incoming entity completes the provider application in full and has to show a process for the smooth delivery of the service between the two legal entities.
How long that takes is the number that should shape your offer. CQC has publicly described working through a backlog of homecare applications more than ten weeks old, so ten weeks is a floor for planning, not a promise. A domiciliary agency that cannot bill for two or three months has a cash flow hole the size of a quarter's revenue, and staff who need paying throughout. That is why we treat a slow or uncertain re-registration as a reason to structure the deal as a share purchase, where the question never arises.
The contracts are the other half of this. On a share sale the contracting party has not changed, so council and ICB agreements usually run on untouched. On an asset sale each contract has to be assigned or novated to your new company, and here is the part worth checking before anything else: some local authority and ICB contracts cannot be assigned at all without going back out to tender. If the revenue that justifies the price sits in a contract that will not move, the asset route can lose you the very thing you are buying, while the share route inherits it intact along with whatever else is in the company. Confirm which contracts can actually transfer before you decide.
The tax on each route: stamp duty, SDLT, VAT and corporation tax
Tax rarely decides a care deal on its own, but it changes the numbers enough to matter. On a share purchase you pay Stamp Duty at 0.5 percent of the price, due once the consideration passes 1,000 pounds, as set out in HMRC's guidance on tax when you buy shares. On a 600,000 pound share deal that is 3,000 pounds, and there is no VAT on the shares.
An asset purchase is taxed piece by piece. There is no Stamp Duty on goodwill or the client list, which is often the bulk of a care agency's value, so on that front an asset deal can look cheap. If premises come with the business, Stamp Duty Land Tax applies to the property at the non-residential rates, which for 2026 to 2027 are nil up to 150,000 pounds, 2 percent on the portion to 250,000 pounds and 5 percent above that. Most domiciliary agencies own little or no property, so this is usually small or nil, but a care home deal is a different matter. VAT normally falls away too, because selling a care business complete enough to carry on is usually a transfer of a going concern, which HMRC does not treat as a supply for VAT when the conditions in Notice 700/9 are met, chiefly that you use the assets to carry on the same kind of business and register for VAT where the seller was registered.
The tax that follows you home is corporation tax. A second company under your control is an associated company, and associated companies share the corporation tax thresholds. For 2026 to 2027 the 50,000 pound small profits limit and the 250,000 pound main rate limit are, per HMRC's corporation tax rates guidance, divided by the number of associated companies. Add the acquired company and both limits halve to 25,000 pounds and 125,000 pounds across the group, so more of each company's profit is taxed at the marginal rate of about 26.5 percent rather than the 19 percent small profits rate. It is not a large sum on a single small agency, but it is a real annual cost the deal has to cover, which is why the tax modelling belongs in the same review as the price. This is the kind of question our tax planning and advisory work is built around.
How do you finance a 600,000 pound care acquisition?
Most care acquisitions are funded from three sources, not one, and lenders expect to see all three in the mix. Your own cash goes in as the deposit and shows the lender you have something at stake. A bank or asset-based lender covers the largest slice, usually against the acquired business's contracted revenue and its debtor book rather than bricks, which suits a domiciliary agency with strong council and ICB income. The seller then leaves part of the price in the deal as deferred consideration or an earn-out, payable over one to three years and often tied to the business holding onto its contracts and its care hours after you take over.
That last piece does double duty. It bridges the gap between what the lender will advance and the price, and it keeps the seller honest through the handover, because their final payment depends on the business staying healthy. The stack below is one illustrative way a 600,000 pound deal comes together.
Whatever the mix, the lender's decision rests on numbers you have to produce and keep producing: a clean set of accounts for the target, a forecast that shows the combined business servicing the debt, and monthly management accounts once the deal is done. A care agency that cannot show contracted hours by funder and a reliable debtor position will struggle to raise acquisition finance at a sensible rate, so getting the reporting in shape is part of getting the deal funded, not an afterthought.
Running two care companies once the deal closes
Owning two care companies does not automatically mean full consolidated group accounts. A parent whose group has aggregate turnover of no more than 15 million pounds net, a balance sheet total of no more than 7.5 million pounds net and no more than 50 employees qualifies as a small group and is exempt from preparing consolidated accounts, under the Companies House size thresholds that apply for periods beginning on or after 6 April 2025. A single agency and a 600,000 pound acquisition sit comfortably inside that, so each company simply files its own accounts. The consolidation only becomes a filing obligation if the combined group outgrows two of those three limits.
What you do need from day one is consolidated payroll and consolidated management accounts, whether or not the statutory accounts are grouped. Two companies mean two PAYE schemes, two sets of pension duties and two VAT positions to keep straight, while you still want a single monthly view of the whole operation, cash, margin by service, contracted hours and debtor days across both. The timeline below shows where these pieces land in a typical deal.
Every care acquisition sits on top of the same finance and compliance base as the rest of your operation, from payroll and CQC-ready reporting to VAT and the monthly numbers a lender wants. Our accountants for care agencies handle that base, and the acquisition work described here builds straight on it, so the second business is integrated rather than bolted on.
What to do before you sign
If a second care business is on the table, the practical steps are these.
- Confirm the CQC and contract position first. Check the target's registration and rating, and ask which council and ICB contracts can move on an asset sale before you choose a route.
- Default to a share purchase, then look for reasons not to. Buy the shares under a holding company unless the compliance or liability history is bad enough to justify starting a fresh registration.
- Do proper due diligence on the company you are inheriting. On a share deal that means the historic PAYE, VAT, disputes and any regulatory findings, not just the profit and loss.
- Model the tax and the funding together. The 0.5 percent Stamp Duty, any SDLT on premises, and the associated companies effect on corporation tax all belong in the same view as the price and the debt.
- Get the reporting acquisition-ready. Clean accounts, a combined forecast and monthly management accounts are what secure the finance and keep the group running afterwards.
Buy the shares of a clean business under a holding company and you keep the registration, the contracts and the revenue, and take on a known set of liabilities you have checked. Buy the assets and you leave the old company behind but accept a re-registration that stops the billing and contracts that may not follow. The route that is right for your deal depends on the one thing we flagged earlier, whether those council and ICB contracts can be assigned, so settle that before anything else. LOYALS is a King's Cross firm of accountants and business consultants that models the deal, sets up the holding company and runs the consolidated payroll and management accounts for care groups across London, and we would rather tell you a target is not worth the price than see you buy a registration you cannot keep.