Taxi Driver Online

Goodwill

Goodwill is a very general concept. It is the value placed upon the likelihood that the customers or clients of a partnership's business will continue to deal with it after there is either a change in the partnership, or a sale of the business as a going concern. In external terms, on the occasion of an outright sale, it represents the difference between the price that a buyer is prepared to pay for the overall business and its connections, and the market value of the assets.

It therefore reflects the extent to which the business has, by whatever means, been able to build up its reputation. It may be particularly attached to certain features of the business, such as the name, the use of that name in the form of a trade mark, or the premises from which the business trades. Its value is a matter for negotiation between the selling partnership and the buyer; and, as such, it does not matter what is said in the partnership agreement—the market decides its value. Goodwill built up within a firm, where there has been no transaction regarding it, is rarely shown in the balance sheet of the business.
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Intangible property rights under a licence quota or similar authority or permission granted by a relevant regulatory authority on the basis of restricting the number of licenses to the exclusion of others, does not amount to goodwill.

Regards

JD

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Copyright notice © The contents of this post are copyright of JD and are not to be reproduced outside of TDO without written permission.

Many Taxi license holders use the term goodwill as sales propaganda to infer the license you are buying has attained a level of intrinsic value other than its scarcity value.

Perhaps the next time someone offers you a plate in a restricted authority you might consider asking them to separate the goodwill from the scarcity value of the plate and make them an offer accordingly. Perhaps their estimation of Goodwill is higher than the scarcity value of the plate but at least you should get a reduction either way. It would be most amusing to see the look on the face of the seller when you tell him to keep his goodwill.

On a more realistic note, the Wirral case firmly puts to rest the notion that goodwill is attached to a Taxi license plate.

Regards

JD

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Copyright notice © The contents of this post are copyright of JD and are not to be reproduced outside of TDO without written permission.