Home For accounting professionals General accounting discussion
Current updates regarding coronavirus (Covid-19) and the precautions AAT are taking will be continually updated on the below page.

Please check this link for the latest updates:
We hope you are all safe and well and if you need us we will be here. 💚


Sole Trader incorporation....advice please!

Finchy01Finchy01 New MemberRegistered Posts: 11
I am after some technical advice regarding a client who wants to incorporate to a Limited Co.
(I may have become out of my depth with the correct tax and accounting treatment!)
What are the rulings on the transfer of assets that belong to the ST, into the Ltd Co?
There is also Goodwill in the ST accounts relating to a business he bought in 2012, can this to be transferred to the Ltd co also?
What about Debtors and Creditors including a loan, are these balances the responsibility of the ST and non-transferrable to the Ltd Co?
Any retained earnings in the balance sheet, does this belong to the ST and non-transferrable?
Any advice is gratefully received
Have a good day all

Comments

  • paulstaffordpaulstafford Feels At Home Registered Posts: 126
    This can be quite a complex transaction and I suggest finding a friendly tax accountant in your area who will advise your client, as there are too many variables to cover off on a forum.

    The business should be valued at the date of transfer and goodwill ( if any) arising from that exercise will be shown in the ltd balance sheet.

    For ease of accounting I would suggest leaving the debtors and creditors of the Sole trader as the responsibility of the sole trader business.

    Earnings in the balance sheet of the sole trader aren't transferred.
  • Finchy01Finchy01 New Member Registered Posts: 11

    Thanks for the friendly advise Paul. Wish me luck!!
Sign In or Register to comment.