Converting a sole trader business into a limited company
As the profit of a sole trader business grows, a limited company can bring tax savings and limit your personal liability. This guide goes through the steps for transferring your business to a new company in a controlled way.
You will need
- Your accountant's calculation of the tax effects
- A balance sheet and a list of the business's assets
- Suomi.fi identification for the YTJ service
- A list of customer, rental and supplier contracts
Steps
Work out whether the change pays off
A limited company often pays off once your profit has stabilised well above what you need for your own living costs. Ask your accountant for a comparison of taxation, costs and ways of withdrawing money.
Choose the transfer method
Set up the limited company
Register the company in the tax registers
Transfer assets and contracts
Open a bank account and arrange insurance
Inform your customers
Close the sole trader business
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