Sole Trader incorporation....advice please!

Finchy01 Registered Posts: 12 Regular contributor ⭐ ? ⭐
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


  • paulstafford
    paulstafford 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.
  • Finchy01
    Finchy01 Registered Posts: 12 Regular contributor ⭐ ? ⭐

    Thanks for the friendly advise Paul. Wish me luck!!
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