Changing from Sole trader to Ltd Company

Skadaddle

I am a sole trader and doign quite well so need to expand change to a limited company.

a) can it be just converted or is it a case of closing down the sole tradership & opening a limited company.

- I have 3 business names under sole trader, can these be transferred to LTd or do they need to be closed down and retaken

- I have a number of websites, how do I transffer ownership from soletrader to company.

Is the above a costly process and can I do it myself, I am relatively familiar with CRO applications.

How long does the process take approx.

any advice or tips are appreciated.
thanks

J_Wholesale

I'd get your accountant to do it for you, or if you don't have an accountant, hire one. A good accountant should more than pay for himself every year.

As with most bureaucracy in this country, don't expect anything to happen quickly. Expect it to take a minimum of 4 months to get everything organised: new vat numbers, new bank accounts (4 months - no joke), etc.

Seriously, don't even try and do it yourself. Why learn how to do something that you'll only ever have to do once in your life? This is one of those times you really benefit by paying someone professional to do it for you.

And... don't take advice from anyone who hasn't actually gone through this, otherwise you'll start believing those "it's a piece of cake" and "a couple of weeks" lies.

NomadicMe

Did this a few years ago and used old bank accounts etc as trading names and changed ownership/ legalities to the ltd company- as advised bu J_Wholesale, get the accountant to sort it for you- not worth the pain.

It really is not that difficult but it's the amount of bureacracy and paperwork required that's just a pain- start the new company first and then transfer everything into it.

mneylon

For existing businesses ie. RBNs, you'd be switching the type of RBN from sole trader to that of an LTD. Basically the existing one would be extinguished and you'd register new ones under the LTD.

(Of course if the new LTD is an exact match of an RBN there's no point in replacing it)

For domain names:

• .com is easy - just update it via your provider's control panel or ask them to help you do it
• .co.uk - you'll need to do a "trade". Your registrar can advise on this
• .eu - a "trade" is required
• .ie - you'd need to do a "holder update"

HTH

Michele

dbran

Hi

It depends on the size of the business involved.

If it is a small business then it may just be a case of winding down the old sole tradership and issuing invoices from the company from a certain date onwards. Then there is the practical headacke of transfering over bank accounts, vat numbers, business names etc.

If it is a large business, then this can be more complicated especially if there are loans, property or goodwill involved. It can be an area of tax planning but can also be tricky area if it is not carefully considered properly.

Why do you want to operate as a company in the first place though?

Kind Regards

dbran

LH2011

J_Wholesale wrote: »

I'd get your accountant to do it for you, or if you don't have an accountant, hire one. A good accountant should more than pay for himself every year.

As with most bureaucracy in this country, don't expect anything to happen quickly. Expect it to take a minimum of 4 months to get everything organised: new vat numbers, new bank accounts (4 months - no joke), etc.

Seriously, don't even try and do it yourself. Why learn how to do something that you'll only ever have to do once in your life? This is one of those times you really benefit by paying someone professional to do it for you.

And... don't take advice from anyone who hasn't actually gone through this, otherwise you'll start believing those "it's a piece of cake" and "a couple of weeks" lies.

i did not use an accountant , when registering for vat, setting up bank account , or other registrations.

limited company formation done in 3-5 days with a formation agent.
bank account setup in 2 weeks. VAT numbers, once you have forms correctly filled out, 10 days.

its when you actually realise the processes and forms involved, you would seriously question what the 'accountant' would charge for this work, as some of it is quite easy to do, depends on the person really.

the time frames i quoted above are from real life experience of doing it, and a lot of information is freely available on the internet, so it would be wise to do some research and get some advice before doing anything, some of the banks give a 1hr free consultation with a business financial advisor when setting up a new account so it would be worth looking into that.

smcgiff

LH2011 wrote: »

an accountant is not needed.

limited company formation done in 3-5 days with a formation agent.
bank account setup in 2 weeks. VAT numbers, once you have forms correctly filled out, 10 days.

its when you actually realise the processes and forms involved, you would seriously question what the 'accountant' would charge for this work.

the time frames i quoted above are from real life experience of doing it.

You MIGHT be right, but this could be a case of a little knowledge being a dangerous thing. You're just talking about the mechanics of incorporation, registering for tax.

Would you like to continue and give further advice on, say, what to do with the assets held prior to incorporation?

smcgiff

The op asked for more than what you answered, specifically re closing down a sole trader business and starting a limited company. There are possible tax planning implications. Saying he didn't need an accountant could be bad advice.