When buying a business, across any industry, you will come across these terms “Leasehold” and “Freehold Going Concern”. This article looks at what is a Leasehold and what is a Freehold Going Concern.
A leasehold is also termed as “buying the business”, without the land and buildings.
With a leasehold you are buying:
- A lease which gives you the right to occupy land and the use of the buildings on that land
- The plant and equipment, fixtures and fittings that are required to operate the business; and
- The goodwill of the business
When you are looking at buying a leasehold, you are buying the business, with plant and equipment, fixtures and fittings and goodwill to operate the business and taking over a lease with the right to occupy and operate that business on land.
Freehold Going Concern
A Freehold Going Concern is the freehold property (including buildings) and the business operating on that property. The same party would own the land and buildings and operate the business.
With a Freehold Going Concern, you are buying:
- The freehold land and buildings
- The business – which would include plant and equipment, fixtures and fittings and goodwill (which usually includes phone numbers, customer lists, IP, etc)