Business Transfer Agreement – Sole Trader to Limited Company
This Business Transfer Agreement – Sole Trader to Limited Company is a simple short form asset transfer agreement covering the specific situation of a sole trader changing the business vehicle through which he/she operates to a limited company and requiring an agreement to document the transfer of his/her business assets and liabilities to the new company.
This agreement covers the assets that will generally be owned by a sole trader and require transferring, these include, the goodwill of the business, its physical assets, stock, contracts, premises, IPR and IT rights. This agreement also covers what assets will be excluded from any transfer. The consideration for the transfer of the assets is the issue of shares in the new limited company.
By properly documenting the transfer, any future misunderstanding or dispute as to the ownership of the assets should be avoided. This agreement includes the following clauses:
2.Transfer of the Business
Schedule 1 – the sole trader
Schedule 2 – the company
Schedule 3 – the excluded assets
Schedule 4 – the premises
This agreement has been drafted on the basis that the sole trader will own and control all the shares in the limited company and that the company has already been formed and registered with Companies House. For further information and all the documents required in order to form a limited company, please see our Company Formation documents.
This agreement does not include any reference to tax, please refer to HMRC’s website and seek independent tax advice if necessary.
If you are running a web based business or a business that is primarily conducted online, please refer to our Business Transfer Agreement – Sole Trader to Limited Company (web based business) . This agreement has been drafted with a web based business specifically in mind and includes an assignment of software and web based IPRs.
This Business Transfer Agreement is in open format. Either enter the requisite details in the highlighted fields or adjust the wording to suit your purposes.