Changing a Sole Prop to a (Pty) Ltd

[Incentive]

Thanks guys for your kind assistance.

My main concern is regarding the moving of the assets currently in the name of the individual trading as the sole prop, over into the company, especially fixed assets. This would involve transfer duties, in the case of buildings? The sole prop will hold 100% in the company. To limit these costs, would it be best to only move the operational assets over into the new company, while renting the building from the sole prop?

And then, would the new company be able to carry on trading as a going concern, and use the financials of the sole prop as its historical financials?

[CLIVE-TRIANGLE]

Thanks guys for your kind assistance.

My main concern is regarding the moving of the assets currently in the name of the individual trading as the sole prop, over into the company, especially fixed assets. This would involve transfer duties, in the case of buildings?

There are many issues; is the proprietor VAT Registered? Is the company VAT registered? Then there are capital gains to consider. Detail is important.

The sole prop will hold 100% in the company. To limit these costs, would it be best to only move the operational assets over into the new company, while renting the building from the sole prop?

Your property option on the face of it involves the least drama.
Other assets; you need to consider the same issues; VAT, CGIT and so on.

And then, would the new company be able to carry on trading as a going concern, and use the financials of the sole prop as its historical financials?

For illustration purposes only. The company has no history prior to it's registration. Even if it is an old shelf company, the sole proprietor history is not it's history.

Simply put, the one ceases and the other starts.

[Richard S]

In principle it is best to never put your assets into your trading company.
If something goes wrong with the business - and it can be due to a multitude of things, such as bad decisions, deals going sour, clients going bust and unable to pay you, accidents, health issues, etc. - then your buildings and other assets are not at risk. Rather leave them in your own name or even better, put them into a trust. The trust can own the assets as well as a separate pty which owns the business. Because this sounds like a reasonable sized business and property is involved I would recommend that you spend a few rand on advice from a trust attorney or an accountant.
But try to separate yourself from your business as well as your assets.

[Justloadit]

In principle it is best to never put your assets into your trading company.
If something goes wrong with the business - and it can be due to a multitude of things, such as bad decisions, deals going sour, clients going bust and unable to pay you, accidents, health issues, etc. - then your buildings and other assets are not at risk. Rather leave them in your own name or even better, put them into a trust. The trust can own the assets as well as a separate pty which owns the business. Because this sounds like a reasonable sized business and property is involved I would recommend that you spend a few rand on advice from a trust attorney or an accountant.
But try to separate yourself from your business as well as your assets.

Damn good advice.
Fortunately I did this. The sheriff visited sometime back for something I was not aware off, and came to bite my but, but I was pleased to tell the sheriff that the company owned nothing, that even the furniture belonged to the landlord. The problem was cleared later, but only due to the fact that there was nothing to attach. Had there been, my business would have been in deep trouble, and would have required me to give up a lot to resolve the problem with in the prescribed period. With out anything to worry about it was very easy to make arrangements.

So the fact that you are in business, and that you are careful does not mean that you are completely clear, there is always some curved ball out there that you are not even aware of that comes and gives you a very hard smack. Being protected like this sure gives you the ability to control the situation in your favour.

[KristiKat]

Thanks guys for your kind assistance.

My main concern is regarding the moving of the assets currently in the name of the individual trading as the sole prop, over into the company, especially fixed assets. This would involve transfer duties, in the case of buildings? The sole prop will hold 100% in the company. To limit these costs, would it be best to only move the operational assets over into the new company, while renting the building from the sole prop?

And then, would the new company be able to carry on trading as a going concern, and use the financials of the sole prop as its historical financials?

I don't understand your question,

I mean THE CC cannot rent from the sole proprietorship if you are apt in changing it into the CC.