When you set up a limited company to take over your existing business you should consider the following matters.
Fixed assets (excluding property)
- Leases to be transferred to new limited company
- Ownership of motor vehicles not on lease to be transferred
- Maintenance contracts on office computers and equipment to be transferred
All customers of the company to be sent a letter informing them of the change, new company name and date of changeover.
All suppliers to the company to be sent a letter informing them of the change and requesting all further invoices and statements to be in the name of the new company from the changeover date.
This will need to be monitored to ensure that all invoices are addressed to the company and letters and faxes sent to any companies not changing the relevant details.
- Bank accounts to be opened in the name of the new company.
- Old bank accounts to be closed on the day before commencement of the new company and balances transferred as necessary.
- Bank security arrangements will need to be revised and adjusted as necessary to reflect new company status.
- New letters of offer re term loans and overdrafts will need to be issued and reviewed in detail.
- Ensure that a plentiful supply of cheques, lodgement slips etc. in the name of the new company are received before the date of changeover.
- Ensure all business accounts are transferred including deposit accounts.
- Close allaccounts in the name of the old business.
Order new stationery for the company to include all documents issued by the business e.g.
- Letterheads and envelopes
- Compliment slips
- Fax cover sheets
- Order books used to order from suppliers
- Delivery dockets
- Van docket books
- Cash sale books
- Plastic bags, wrapping paper etc.
- Time record cards/sheets
- Any other documents on which the business name appears
- Transfer insurance cover. Inform insurance broker of the date of changeover and arrange for cover in all areas to be transferred to the company i.e. fire, theft, all motor vehicles, cash, cash in transit, stock, other equipment, public liability, employers liability, product liability, computer insurance etc.
Inform utility companies and arrange for changeover of billing:
- ESB / Airtricity
- Bord Gas
- City/County Council re rates and water charges
Directors personal taxation
The Revenue must be informed of the transfer of employment of the directors. Ensure that the directors are registered as employees of the company and that the tax free allowances are transferred to the company.
Where formal contracts of employment are in place, this must be re-issued in the name of the new company and re-signed by the employee and the directors when the changeover takes place.
In any event, a notice must be issued to all employees informing them of the proposed change and outlining the arrangements for service and pension rights to be transferred to the new company.
If trade unions are involved an early meeting should be held and any potential difficulties resolved well in advance of the changeover.
If a pension scheme is in place, arrangements must be made to transfer the scheme to the new company and to ensure employees benefits are secured.
The Revenue must be informed of the transfer and tax free allowance certificates obtained in the new company. P45s must be prepared for each employee of the sole trader and part 1 submitted to the Revenue with a letter outlining that the employees will now be employed in the company.
Any areas in which the business has previously had its name displayed i.e. outside its premises, on vans, trucks etc., Golden Pages, any other advertising medium, must all be changed to show the new company name.
Any long term contracts entered into by the business either with customers or suppliers must be altered to show new company name and status.
Any computer software will need to be adjusted to show the new company name. Also invoices, statements etc. may have to be adjusted for new stationery layouts.
Any credit cards and petrol cards will need to be re-issued.
Trade associations and organisations
Inform any associations of which the business is a member of the change.
Register the new company for all relevant taxes. Apply for C2 if required.
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Please call Noel Murphy today on 021-4310266 if you need further information on incorporating an existing business or a free consultation.