Partnership to limited company in one set of accounts

Partnership to limited company in one set of...

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Client (using Quickbooks) has incorporated himself half way through his partnership financial year and continued with same set of accounts. I have been thinking about this for too long and I am a bit stuck. Do I need to take a copy of the accounts and then delete the half that I don't want in either copy (very time consuming), ie in partnership set take out all entries after incorporation (which would take ages). Or do I just post the outstanding debtors and creditors to a dir. loan account and re-post payments from/to this account instead of debtors/creditors for those particular transactions.
jackie

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By User deleted
06th Dec 2005 10:08

Partnership to Limited Co.
Hi,

Sorry to come back to this issue again.

Can you tell me if goodwill already in existance in the partnership (representing franchise fees) can be transferred to Limited company at wdv.

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By AnonymousUser
25th Nov 2005 20:40

Election for book value ...
You can elect for stock to be transferred at book value (S.100 ICTA 88 I think). Joint election to be signed by partners and direcors.

If a partnership debtor is banked in the company then it will be a credit to Directors account which can be drawn without tax consequences. Likewise payment of any partnership liabilities will be debits to the loan account.

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By User deleted
26th Nov 2005 12:02

incorporation and stock
Jimmy,

Thanks for that, just wanted to make sure that I am doing this correctly.

Jackie

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By AnonymousUser
23rd Nov 2005 22:11

QuickBooks is very flexible ......
QuickBooks is very flexible in its reporting ie using the custom filter you can run P&L accounts for any period you like and strike a Balance sheet date at any date. Shouldn't be too difficult to separate the 2 periods if that's what's required. Also, the nominal activities can be exported easily into Excel which faclitates analysis etc

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By User deleted
23rd Nov 2005 21:56

What about a Company bank account?
Sounds like the client has incorporated but not discussed any of this with you at the time. I assume that a Company bank account has also not been set up? Is this going to be rectified? Just because a Company has been set up, doesn't mean the trade has to go into it from day 1. Are all the invoices in the name of the Company; has the VAT registration been transfered? Has the Form 42 been submitted? Get my drift here? If none of these has happened, you may find the easy approach is to do the whole year as the partnership and transfer the trade properly at a specific date this year. Hope this helps a bit.

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By User deleted
24th Nov 2005 09:21

Quickbooks. New company continued in old accounts
Thanks for your comments.

The ltd company was set up around 13th September, however the company bank account wasn't opened until 1st November. There are no printed copies of sales invoices, so I cannot honestly say whether they were sent out under limited/partnership. The VAT number appears to have been transferred to the Ltd co, although Customs and Excise won't speak to me about it as I am waiting for authorisation to gain info from them (client has no idea and has kept no photo-copies of prev. returns or correspondence). I would have much preferred to run the whole year as a partnership, but as the VAT is in Ltd co. name and the bank account has been active, this is not an option, so I am working to 1st Nov as start of company. As parnership only operated for a year I don't think there are any real goodwill issues, but the debtor account is very high as at 1st November, much of this being settled in Nov/Dec with payments going into limited co. bank account. Many bills from before 1st November have been paid from limited co. account, likewise bills relating to ltd company have often been paid out of partnership. I have made a spreadsheet to analyse the money coming in and out of both accounts to work out what was owed on either side, and then I got bogged down and wanted to separate the accounts on Quickbooks, but having looked again I probably don't need to.

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By User deleted
25th Nov 2005 09:14

Partnership to limited company back-dated
Can I just ask another couple of things, sorry to bother you but I just want to make sure I have it all covered. I understand that stock can be transferred to the new company as long as the market value is higher than the purchase price, in which case it can be transferred at purchase price, with profits arising on sale in the new company. Is that correct?

If there is a large debtor on the last day of the partnership who settles on the first day post incorporation, am I write in thinking that this money then goes into the directors loan account and can be drawn down tax free as profits will have been taxed on the partnership under self-assessment. Likewise with creditors being paid from the loan account. Thanks for your help.

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By AnonymousUser
24th Nov 2005 02:49

I'm not sure...
I'm not sure that I agree with Jimmy that it's a simple matter of using the software to "split" the accounts arbitrarily.
Just because an individual sets up a ltd co, does not in itself mean that, as from the date of incorporation, his/her business transactions should be automatically counted as done "in the name of the company".
As the previous commentator said, there must be evidence that the company itself is trading. Letterheads/invoicing in company name/company bank account (although there is no absolute legal requirement for a company account), etc etc.
In any case, a separate set of "books" must be kept for the company (ie, a separate QuickBooks file).

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By AnonymousUser
24th Nov 2005 21:26

Tom......
I was not commenting on whether the transactions were partnership ones or company ones - I was merely trying to offer a practical solution IF the transactions have to be separated out from a certain date(as in fact appears to be the case here).

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