Changing a Sole Trader in to a Limited Company | AccountingWEB

Changing a Sole Trader in to a Limited Company

I have just registered self employed and have started to prepare Final accounts for few clients.
One of the client wants to convert his sole trader into a limited company. Will there be any tax implications ?
Or is it just a matter of starting a limited company and transferring all the assets and liabilities to the limited company?

PLease help me with the process.


dbowleracca's picture

This is for practice management!

dbowleracca | | Permalink

I do not wish to sound offensive, but this discussion group is for practice management issues such as how to generate more fees, make more profit, get better clients etc. It is not for asking questions - that is what Any Answers is for.

Also, again without wishing to offend you, if you do not have the knowledge to assist a client in incorporating, and aren't aware of all of the pitfalls then I suggest you refer this specific piece of work on to someone who can really add value. Is there any goodwill? What assets are to be transferred? Will the consideration be wholly shares, or a mixture of cash/shares/loan? At what value are the assets to be transferred - TWDV or MV?

These are just a few of the questions you need to be asking yourself prior to advising the client.

If you look at the blogs, a recent post by Nino shows how he charged £21,000 for an incorporation. What level of fee do you have in mind? Typically, for an asset transfer with goodwill the fee should be at least £1,000 including the formation fees, to allow you sufficient time to cover all the things above.

Hope this one works out for you - and don't under price yourself!

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