UKC

Hi all,

Just a quick legal question – we’re currently in the process of moving our Partnership to a Limited Company. In the eyes of Companies House we’re Ltd now however we’ve not yet told HMRC (I believe we have three months to do this).

Therefore strictly speaking are we a Limited Company or a Partnership right this second? I’m assuming we’re Ltd and I’m a ‘director’ now and not a ‘partner’…

It’s not massively important, just interested! Thought the brains of UKC may be able to help!

Thanks!

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In reply to A Longleat Boulderer:

The reporting to Co's House and HMRC is just reporting. What actually matters is whether you have legally transferred your partnership's trade to the company. Presumably there was documentation dealing with the legalities of the transfer and you took legal/tax advice. Once the trade is in the company, you will be acting as a director rather than as a partner (assuming you have been appointed a director of the company).

There may also have been other people to tell on transfer of the trade and other t's to cross etc.

I hope this wasn't part of some abusive and hugely immoral "scheme" to minimise your tax liabilities...

In reply to A Longleat Boulderer:

How come you went over to a limited company instead of a limited partnership, if a traditional partnership had served you well previously? Unless you're reinvesting a lot of money into the business, a limited company usually ends up paying over more to the government.

No reason as such, I'm just nosey :-P

In reply to Richard Carter:

Sale of partnership goodwill to the company at only a 10% tax rate?

Uplift in tax base cost of capital assets?

Use of lower CT rates (circa 20%) as opposed to personal rates if not drawing full profits each year?

Genuine commercial reasons?

In reply to Skyfall:

I could have guessed at some reasons, that's why I asked him :-P