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Incorporation muddle

Incorporation muddle

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A new company was incorporated to run a sole trader business from 1 April 2010. However since that date invoices have been raised in the old name and some in the Ltd company name. All the text books assume that old business ceases and new incorporated businees commences on the following day. This clearly hasn't happened.

So do I treat all post 31 March transactions as that of the new Ltd company? or

Split transactions between Ltd company and old business on the basis that the old business has not ceased.

Apologies if the answer is considered obvious by some.

Replies (6)

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By petersaxton
07th Oct 2011 09:55

what is the reality?

has the old business ceased?

are the sole trader invoices in error?

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Replying to John Collingwood:
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By ongwright
07th Oct 2011 11:15

incorporation reality

Thanks for your reply.

It looks like the old business ceased and any sole trader invoices issued in error, but I am having a discussion with client to obtain greater clarity.

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Accountants & Business Advisers
By Gladstone
07th Oct 2011 10:00

Treat as company's

I would have credited all the invoices issued under the old name from 1st of April and re-issue them on  proper stationery to indicate the trading from the newly incorporated company and include them in the company since the motive of incorporation was to do this from day one anyway.  This is also on the assumption that sole trader ceased operations and advised HMRC of the incorporation. Happy to take others' opinions on the subject.

Gladstone.

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Jennifer Adams
By Jennifer Adams
07th Oct 2011 10:56

?Bank account?

Which bank account were payments made from?

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Replying to Batty Girl:
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By ongwright
07th Oct 2011 11:17

Thanks for your reply.

Some cash received into Company bank account and other cash receipts into clients personal bank account. (cheques and BACS). Likewise expenses paid.

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By petersaxton
07th Oct 2011 11:41

Good luck

I think you need to tackle the client about this mess.

I had a client who went limited and although they did everything properly customers still paid into the sole trader bank account which meant that he ran up a six figure director's current account. He then promptly spent the money rather than transferred it.

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