Turning an LLP company into a Sole Trader?

[Specialized]

Hi, myself and my business partner set up our design company as an LLP a couple of years ago. The business has always been very small and doesn't earn enough for two people to live off.

It's enough for me, but my business partner has decided she wants to pursue a career as a fitness instructor and has now moved away from the area to focus on getting her qualifications. I should point out we are still really good friends and talk regularly - there's no bad blood between us.

Basically I want to turn our LLP into a Sole Trader company (with me as the owner) but I have no idea where to even start - is this even possible? I'm hoping it's quite simple and won't cost a lot of money, but could really use some advice on what steps I need to do next.

When we first started the company we paid for a solicitor to draw up all the documentation for our company, but I don't have the sort of money it will cost to go back there (it was about £600 for the original documentation).

Also as a side note, at one stage about a year ago we were thinking of closing the business altogether. So I contacted Companies House asking the best way to go about doing this and the woman on the phone was absolutely useless, she didn't give me any helpful advice and I came away none the wiser, so I'd like to deal with them as little as possible in the future!

If anyone can give me some advice on what to do next it would be really appreciated, thanks.

[sirearl]

You gotta love the little bleeders.?

"When we first started the company we paid for a solicitor to draw up all the documentation for our company, but I don't have the sort of money it will cost to go back there (it was about £600 for the original documentation)."

Earl

[Kent Accountant]

Must admit I've never done it, but according to Companies House, an LLP can under certain circumstances be struck off the register. See here (http://www.companieshouse.gov.uk/about/gbhtml/gbllp3.shtml#seven). It was however IMHO a strange decision to trade as an LLP originally :| As it is taxed as a partnership, the tax situation should not be too complicated, but you will probably need to speak to your accountant to clarify this

[mahutchinson]

An LLP can be struck off in the same way as a company. The members will need to transfer their contributions out and it can then be struck off once all assets and liabilities have been cleared. Your accountant will need to inform the Inland Revenue and tie up any tax liabilites before you apply for strike-off. If you are going to become a sole trader then any assets/liabilities you are taking out of the LLP will already be in place as a sole trader is simply you personally. You will however need a new bank account for the sole trader business to keep the business transactions and assets separate from your personal finances. By the way, what did the lawyer do for £600 ? Those are City prices for an incorporation.

[Specialized]

Thanks everyone for the replies. I didn't realise the company would have to be struck-off - I really hope I will still be able to keep the same business name once I start a new company as a Sole Trader.

The company doesn't have any outstanding debt or liabilities, so it's quite simple to wrap up in that respect.

The only problem I can see is that in the link Kent Accountant posted, it says to get struck-off the register, your company can't have traded for 3 months prior to applying. Obviously I can't just stop trading, so is it ok if I set up my new Sole Trader company ASAP and start putting all payments through it, which will mean I can then leave the LLP to do nothing for 3 months - does that sound the right way to go about it?

The high cost of the solicitor was because we originally had plans to conduct business in a number of different countries, not just the UK and the documentation had to cover us for a lot of liabilities. We haven't ended up trading anywhere other than the UK so in hindsight it was a bit of a waste!

[mahutchinson]

Yes, that would be the only way to do it I would think. By the way, "trading" does not include anything to do with winding up the business and paying off debts etc. so you can continue clearing things up in the 3 month period. Regarding business name, there's no reason you can't continue using a business name for the sole trader business. I'm not sure whether you mean you were using a completely different business name instead of the LLP name or you want to use the LLP's name for your sole trader business, in which case you will just take the "LLP" off and state J Bloggs trading as XYZ instead of simply XYZ LLP.