A sole trader or partnership may benefit in a number of different ways by converting its business to a limited company e.g. possible tax and national insurance savings, limiting personal liability for debts and providing a more attractive medium for external investors.

As the conversion will involve the sale of the business from the present owners (the sole trader or partners) to the new owner (the company) there are a number of formalities involved. A new company must be formed, a sale agreement prepared, appropriate company records made up and relevant returns filed at Companies House.

If the existing business operates from premises belonging to the present owners there will also be associated conveyancing issues to consider.

The tax consequences of a conversion can differ greatly depending on how the transaction is structured and professional advice is essential.

For advice on Company and Commercial matters please contact:

Glyn Evans on 01934 637911 e-mail evans@powellslaw.com or
Stephen Soper on 01934 637915 e-mail soper@powellslaw.com.