CALL US ON 08456 800 727

Most businesses start as an individual pursuing a business activity in his personal capacity. Usually that individual trades as a sole trader and will be personally liable for all the debts of his business.

A sole trader who transfers his business to a company:

  • Can take advantage of the limited liability status of a company and will no longer be personally liable for any new debts of what will then be the company’s business (although the company’s lenders and others may want personal guarantees from the individual[s] behind the company).
  • Often attracts more business - many business customers (and suppliers) will only deal with companies.
  • May gain tax advantages - you should speak to your tax adviser about this.
  • Often finds it easier to deal with new investment and new management. A new investor can subscribe for shares in the company and be appointed a director of the company and there are pre-existing rules and law governing the relationship of shareholders and directors.


Helpful Information

About Legal Clarity


View details of our service here.


View details of our service here.

Free Company Name Check

Is your choice of company name available?

Click here to check.

© 2019 Legal Clarity Limited: Corporate & Commercial Legal Services - Company Formation - Company Secretarial Registered in England and Wales (number 6452925) and authorised and regulated by the Solicitors Regulation Authority (SRA number 573589). 1st Floor, Charles House, 148-149 Gt Charles Street, Birmingham, B3 3HT. Tel: 08456 800 727. VAT registration number 925709016.