Business Transfer Agreement – Sole Trader to Limited Company
This Business Transfer Agreement – Sole Trader to Limited Company is a short-form asset transfer agreement for a sole trader who is moving their business into a limited company. It documents the transfer of the business assets and liabilities to the new company.
What This Business Transfer Agreement Covers
It covers the types of assets that a sole trader will typically own and need to transfer. This includes goodwill, physical assets, stock, contracts, premises, intellectual property rights (IPR) and IT rights.
It also allows you to specify any assets that are excluded from the transfer. The consideration for the transfer is the issue of shares in the new limited company.
Why You May Want To Use It
By properly documenting the transfer, you reduce the scope for future misunderstanding or disputes about who owns the assets.
How The Agreement Is Set Out
The agreement is structured to take you through the transfer of the business, the liabilities being dealt with, the consideration (issue of shares) and the completion mechanics. It also includes provisions dealing with employees.
The schedules capture the key factual details needed to complete the transfer:
- Schedule 1 – the sole trader’s details
- Schedule 2 – the company’s details
- Schedule 3 – the excluded assets
- Schedule 4 – the premises
When To Use This Business Transfer Agreement
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.
What Else You May Need
For further information and the documents required in order to form a limited company, please see our Company Formation documents.
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.
Tax Point
❗This agreement does not include any reference to tax. Please refer to HMRC’s website and seek independent tax advice if necessary.
Business Transfer Agreement – Sole Trader to Limited Company is part of Corporate. Just £38.50 + VAT provides unlimited downloads from Corporate for 1 year.