Limited Company Property Purchases

Buying property through a limited company involves additional legal, corporate and lender requirements that do not arise in the same way when purchasing in your personal name. If those requirements are not identified and dealt with early, they can cause delays at the point you are working towards exchange or completion.

We act for landlords, property investors, developers and Special Purpose Vehicles (SPVs) buying property across England and Wales. We understand that investors need more than technically accurate conveyancing. You need clear advice, proactive communication and solicitors who appreciate the importance of mortgage conditions, finance deadlines and agreed completion dates.

Whether you are making your first purchase through a limited company, buying at auction or adding another property to an established portfolio, we will deal with the transaction efficiently and keep you informed throughout.

Clifford Johnston & Co. has over 30 years of experience providing property and conveyancing services. Our Conveyancing Department is accredited under the Law Society’s Conveyancing Quality Scheme (CQS), and from our offices in Manchester and Stockport we work with property investors, landlords, lenders, mortgage brokers, accountants and other professional advisers.

If you are buying property through a limited company or SPV, call us using the number at the top of this page or complete our enquiry form to speak with one of our Property Solicitors.

How Can We Help?

Limited company purchases involve an additional corporate layer that must be dealt with alongside the usual legal work involved in acquiring property.

Our solicitors can deal with the transaction from instruction through to completion and registration. We review the company’s details and authority to purchase, investigate the property title, deal with searches and enquiries, review the mortgage offer and satisfy the lender’s legal requirements.

Where corporate borrowing is involved, we can also deal with company mortgage documentation, director requirements and the registration of lender security after completion.

For experienced investors, we understand that delays can put a transaction at risk. We work proactively with lenders, brokers, accountants and other advisers where necessary to identify requirements at an early stage and keep the purchase progressing.

For those buying through a company for the first time, we explain what is required in straightforward terms so that you understand both the property transaction and the additional obligations created by purchasing through a corporate structure.

Buying Property Through a Limited Company

When a limited company purchases a property, the company becomes its legal owner. The property is therefore registered at HM Land Registry in the company’s name rather than in the personal names of its directors or shareholders.

Many property investors use a Special Purpose Vehicle, commonly referred to as an SPV. An SPV used for property investment is usually a limited company established specifically to acquire and hold property rather than carry on a wider trading business.

Limited company ownership is frequently used by portfolio investors and landlords, but it can also be relevant to developers, commercial investors and individuals making their first corporate property investment following financial or tax advice.

Whether a company structure is appropriate for you will depend on your circumstances. There can be important tax and financial consequences, so decisions about ownership structures should usually be made with appropriate advice from your accountant or tax adviser as well as your solicitor.

Our role is to ensure that, once you decide to purchase through a company, the legal transaction and associated corporate requirements are dealt with correctly.

How Is Limited Company Conveyancing Different From a Personal Purchase?

The underlying conveyancing remains concerned with ensuring that the company acquires a good and marketable title to the property. However, there are additional checks and documents because the purchaser is a separate legal entity.

We may need to examine the company’s incorporation details, directors, shareholders or persons with significant control, Articles of Association and its authority to enter into the transaction. We must also ensure that contracts, transfers, mortgage deeds and other documents are executed correctly on behalf of the company.

Under the Companies Act 2006, a company can generally execute a document by two authorised signatories signing on its behalf, or by a director signing in the presence of a witness who attests the signature. Different documents and transactions may have additional execution requirements.

Where a mortgage is involved, the lender may impose further requirements relating to the company, its directors and the security being taken.

These additional steps are one reason why using solicitors familiar with limited company property transactions can be important. Problems with company documentation or lender requirements can cause delays at precisely the point an investor is working towards exchange or completion.

Limited Company Mortgages, Personal Guarantees and Lender Requirements

A mortgage to a limited company is made to the company rather than personally to its directors. However, that does not necessarily mean that the directors have no personal exposure.

Many lenders require one or more directors to provide a personal guarantee. A personal guarantee is a legally binding commitment under which the director may become personally responsible for the relevant company debt if the company fails to meet its obligations. This can make the director personally liable for the guaranteed debt and may put their personal assets at risk if the guarantee is enforced.

The lender may also require the director providing a guarantee to obtain independent legal advice before signing it. The precise requirements depend upon the lender and the proposed finance.

We review the mortgage documentation and lender’s legal instructions at an early stage so that additional requirements can be identified before they threaten the proposed completion date.

Where a lender takes security over the company’s property, the mortgage will generally constitute a company charge. Details of a registrable charge must normally be delivered to Companies House within 21 days beginning with the day after the charge is created. If that deadline is missed, a court order may be required to register it late.

We deal with the necessary post-completion property and company registrations as part of the transaction.

Funding and Structuring Your Limited Company Purchase

A property may be purchased through a newly incorporated SPV, an existing property company or, in some circumstances, another limited company.

How the purchase is funded will vary. The company may use its own funds, external mortgage or bridging finance, or money introduced into the company by a director or shareholder.

As part of our regulatory obligations, we must understand the company’s ownership and the source of the money being used for the purchase. Depending on the transaction, we may need supporting information from directors, shareholders or other parties providing funds.

If you are considering establishing a new company specifically to purchase property, it is sensible to decide upon the proposed structure before committing to the transaction. Mortgage lenders may have their own requirements concerning the nature of the company, its activities and its directors or shareholders.

You should obtain separate tax and accounting advice before deciding whether a limited company is the right ownership structure for you.

Property transaction taxes also require particular consideration. Stamp Duty Land Tax applies to purchases in England, while Land Transaction Tax applies in Wales. The tax treatment of a company purchase can differ significantly from an individual purchase, particularly when residential property is involved.

For purchases in England, companies buying residential property will generally be subject to the higher residential rates of Stamp Duty Land Tax. A separate 17% rate can apply to certain corporate purchases of individual residential properties worth more than £500,000, although relief may be available for qualifying property rental, development and other qualifying businesses.

We can deal with the legal and conveyancing aspects of the transaction and work alongside your accountant or tax adviser where necessary.

Portfolio, Auction and Time-Sensitive Property Purchases

Experienced investors often need a conveyancer who understands that speed matters.

We act for clients making repeat purchases through an existing SPV as well as investors operating through several companies. Having solicitors familiar with corporate lender requirements can help identify issues early and reduce avoidable delays across future transactions.

We can also assist with company purchases involving auction property and specialist finance. Auction purchases frequently involve short contractual completion periods, while bridging and other specialist lenders can impose detailed conditions that must be satisfied before funds are released.

If you intend to purchase at auction through a limited company, obtaining legal advice before bidding is particularly important. Once a successful bid creates a binding contract, the opportunity to investigate or renegotiate the legal position may be extremely limited.

Our team understands the commercial importance of meeting agreed exchange and completion deadlines and will work closely with your broker, lender and other professional advisers where appropriate.

Transferring an Existing Property Into a Limited Company

If you already own property personally, transferring it to your limited company is not simply an administrative change of name.

The company and the individual are separate legal persons, so moving ownership from one to the other requires a legal transfer of the property.

There may also be significant tax consequences. Where property is transferred to a company connected with the existing owner, Stamp Duty Land Tax can in some circumstances be calculated by reference to the property’s market value rather than simply the amount paid by the company. Capital Gains Tax may also need to be considered.

You should therefore obtain legal and specialist tax advice before proceeding rather than assuming that an existing property can simply be moved into an SPV.

Our Property Solicitors can advise on the conveyancing required and work with your accountant or tax adviser where the proposed transfer forms part of wider property or tax planning.

Why Choose Clifford Johnston & Co.?

Limited company property transactions require solicitors who understand both conveyancing and the additional requirements created by corporate ownership and borrowing.

Clifford Johnston & Co. has over 30 years of experience providing property and conveyancing services. Our Conveyancing Department is accredited under the Law Society’s Conveyancing Quality Scheme, reflecting recognised standards in residential conveyancing practice and client service.

We provide clear advice, transparent pricing and a personal service. We understand the importance of communication when investors are working to mortgage, exchange or completion deadlines and take a proactive approach to progressing each transaction.

Whether you are creating your first SPV, adding another property to an established portfolio or purchasing through an existing company, our solicitors will provide a service appropriate to the transaction and your level of experience.