Process of Sole Trader to Limited Company

Process of Sole Trader to Limited Company

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Hi, It is my first time helping a client transfer their business from sole trader to limited company and want to make sure the process is correct / am I missing anything etc.

Limited company is now formed, aiming to transfer trade to limited company at end of Jan for 1 Feb trading.

What will need to be done?:
- Valuation of Business (any pointers on the best valuation method? Labour intensive, very little in way of assets - just a couple of computers)
- Sole Trader Accounts up to end of Jan
- Client will have to pay full CGT on sale within normal limits, no entrepreneurs relief available as transferring to associated company?
- Aside from the fixed assets, the only other assets are the outstanding receivables which can also be included in the sale, yes? (no liabilities)

Is there anything else?

Thanks

Replies (5)

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By tom123
05th Jan 2017 19:44

With just a couple of computers as the assets - how much is the net book value being transferred?

What about any stock, debtors, etc.

Just thinking aloud.

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By johngroganjga
05th Jan 2017 20:15

Are you sure there is any goodwill to value?

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Replying to johngroganjga:
RLI
By lionofludesch
06th Jan 2017 08:59

My thoughts entirely - is the business just the owner ?

If he leaves, is there a business ?

I wouldn't normally transfer the debtors, creditors or cash. I'd just let the owner collect/pay his own.

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Replying to lionofludesch:
By petersaxton
06th Jan 2017 12:14

Be ready for customers paying the money into the wrong bank account for the next year no matter how many times you explain it simply and clearly.

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By jonnyd
06th Jan 2017 16:52

You will need to write to Customers and Suppliers advising of change of status. Also don't forget to advise Business Insurers. Make sure customer receipts paid into old Sole trader account in error reinvested in New Co to avoid overdrawn DCA.

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