Upgrade from Sole Trader to Limited Company

[tammy14320]

How do I upgrade from a Sole Trader to a Limited Company and will there be any negative effect on my business ?
I have a Fabrics Wholesaler registered as a Sole trader but didnt think it would pick up so thats why I registered as a Sole Trader. I have also applied and received a Merchant with WorldPay.

Can anyone help me with my query?

 

[StevensOnln1]

Do you have an accountant? They would be best placed to guide you through it and get the company setup in the most tax efficient way for you.

 

[LowPrices.uk]

Why do you want to change from sole trader to a Limited Company?

 

[kathymac73]

It is easy to change. But think wisely before doing so. Accountants fees are expensive plus more taxes to pay . Only if your business makes over a minimum amount it's worth it then


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[tammy14320]

I do not have an Accountant yet, I deal with the accountancy myself for now but I will hire an Accountant soon. I don;t see upgrading is a big mission impossible, I just would like a guide to look at or refer to if I have any problems. I also wanted to know if there would be a negative impact on my business and on the merchant side.

 

[Ian J]

It is very simple to change from sole trader to limited company as once the company is formed you just "sell" the assets that you have been using as a sole trader to the limited company and trade under that vehicle.

The above is a highly simplified version though as there are a few tax issues that need to be sorted to make sure that you minimize any tax liability so you would be better off appointing the accountant first and taking advice from him / her on how best to effect the transfer.

There shouldn't be any negative impact on your business at all

 

[TODonnell]

AFAIK the only entity a sole trader has to register with is HMRC, and that's just for tax. You can set up a limited company very easily at the Companuies House website. It's the subsequent tax, returns and accounting issues that are tricky.

You should do like IanJ said and speak to an accountant.