Sole Trader To Limited Company - Incorporating Your Existing Business

Turning your sole trader business or partnership isn't as easy as filling out a form and filing it. There are many aspects to consider; in this video we're going into the basics of incorporating your sole trader business into a new limited company vehicle.

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⏱️ Time Stamps:
0:43 - What is incorporation?
2:07 - Why would you want to incorporate?
3:16 - A brief overview of the incorporation process
7:13 - Capital Gains Tax and incorporation

Operating through a limited company vehicle can bring many advantages including being more tax efficient, having limited liability protection as well as being viewed as more prestigious in the business world.

The main 4 ways in which sole trader businesses are incorporated into limited companies are: in exchange for shares, in exchange for cash or loan account, for an outright gift or for a combination of the three.

When you incorporate into a limited company the first thing you need to do is get your business valued. We can't state just how important this step is as over or undervaluing your business can have a large impact on the incorporation process. Once you have had your business valued by an accountant or similar professional you can proceed with incorporation, taking into account your company's net assets against the value of the company. If the assets are worth more than the company then the difference will be put into your company as what is known as goodwill.

We hope this video helps you further your understanding of the process of incorporating your sole trader business or partnership into a limited company vehicle and takes you one step closer to knowing you numbers. Let us know in the comments what you'd like to see from our future videos. Make sure you're subscribed as we'll be tackling self assessment tax returns, bounce back loans, the director loan account and many other top topics to empower business owners and tax-minded individuals.

★☆★ OUR MISSION ★☆★
Me & my team are dedicated to helping and empowering YOU to 'Know Your Numbers' so you can make calculated and informed decisions in your business, company and personal finances towards your definition of success.

★☆★ OUR PHILOSOPHY ★☆★
If you take care of your numbers (finances), your numbers will take care of you, your family and those you value the most.

🔴 DISCLAIMER
Our videos are for general guidance, education and empowerment in helping you understand accounting, tax and your numbers. They in no way constitute specific advice to your specific circumstances. Me & my team would be delighted to help you with your specific queries or accounting requirements through a formal engagement.

[harbouraccountancylimited]

Hi Tony, A 1st class presentation - making it easy to understand. I look forward to more and have subscribed. Thank-you.

[TheRemikarlos]

Great video. Quick question. Can a sole trader business based in the UK could have the owner of the business living outside of the UK?

[mohammedazeem]

i am interested in joining the accounts and tax academy

[tokenizegames]

Can you discuss this in your video ?
CG65745 - Transfer of a business to a company: computation: transfer of liabilities
The transferor is not required to transfer business liabilities to the company but often does so. This is normally done in practice by the company giving the transferor an indemnity in respect of those liabilities etc etc