Sole Trader to Limited Company

[bsr90]

I can imagine this question has been done to death.. However, I have a different angle I'd like to cover.

I have been operating as a Sole Trader for c. 2.5-3 years. I am moving towards registering the business as a Limited Company.

However, some contracts & Tenders have a stipulation that I be established for at least 12 months before I can bid for a contract.

Can anyone advise the best way to make the transition and/or prove that this is a successor company for the Sole Trader so I can continue to access these contracts? I can imagine some will look on Companies House and assume I'm brand new.. Which would see me lose a significant amount of work.

Any help would be greatly appreciated!

 

[Mr D]

Well the legal entity known as the company will be brand new.

Do you have to quit self employment in order to start doing limited company employment? Or can they run alongside each other for say .... 12 months?

 

[Alison Moore]

If the contract says the company has to have been established for 12 months, then it won't have been. You could send proof to show that you were a sole trader for the past 3 years, but some companies will be strict on it and it will be a blanket no. I guess you could set up the company, but stay Self employed for a while too, so give the company some time to be 'established' but without trading history and accounts, it most likely won't suffice.

 

[Mr D]

If the contract says the company has to have been established for 12 months, then it won't have been. You could send proof to show that you were a sole trader for the past 3 years, but some companies will be strict on it and it will be a blanket no. I guess you could set up the company, but stay Self employed for a while too, so give the company some time to be 'established' but without trading history and accounts, it most likely won't suffice.

Perhaps if some jobs were done self employed and some as employee of the company?

 

[Alison Moore]

Perhaps if some jobs were done self employed and some as employee of the company?

Yes that would work... It depends on the contracts I guess, some just want to see that your company registration was more than 12 months ago, others want detailed accounts.

 

[Mr D]

Yes that would work... It depends on the contracts I guess, some just want to see that your company registration was more than 12 months ago, others want detailed accounts.

Jumping through hoops - the fun bits.

 

[bsr90]

Dear All,

Thanks for your help on this. It's been a bit of a nightmare trying to pull apart the T&Cs of contracts..

My approach will be to run the businesses in tandem for a 12-month period. [Some Central Government contracts are saying 3 years for new contracts.. What a pain!].

Another accountant had suggested making an asset transfer into the Limited Company and providing this documentary proof as proof of long-term establishment. Not sure if this will a) work, b) be sufficient to prove that I've been around a while!