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Can Ltd Company transactions be moved to new Ltd Company?

New client who set up a Ltd company with himself as a majority shareholder in Feb 2012 and started trading in March 2012 with all transactions going through company bank account.

He has now set up another Ltd company with himself as sole shareholder in Dec 2012 and wants to put all the first company trading transactions through as if they were the new companies transactions.

My head is still a bit haggled with self assessment but surely this can't be done?

Any comments or advice on this matter would be very much appreciated

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04th Feb 2013 13:47

No

If Company 2 was not formed until Dec 2012, you cannot put any transactions prior to Dec 2012 through it, even if you could pretend that Company 1 was only acting as an agent for Company 2.

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By law man
06th Feb 2013 14:20

Transfer of contracts

First, the legal formalities for transfer of the contract: if Company No.1 has completed performance of the contract, it could assign the right to collect the payment (to be paid by the customer) to Company No.2. However, Co.2 would have to pay a consideration to Co.1 for this asset.

If the contract has been made (between Co.1 and the customer) but not yet performed by Co.1, then to transfer it to Co.2 needs a novation: the agreement of all 3 parties (Co.1, Co.2 and the customer).

Next: if Co.1 has incurred expenditure, but you want that Co.2 receives all the payment (from the customer) it suggests a transfer from Co.1 to Co.2. Beware duties on directors of Co.1. Also if Co.1 is to be wound up, will it be solvent?

Generally, of course you can not "pretend" that Co.2 was involved throughout (whether before or after incorporation of Co.2) when it was not.

 

 

 

 

 

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