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Category: Sellers

Yes if you can. It is much easier to sell a limited company than a business owned and run by someone trading as a particular name. It also gives the business more value. This may seem a little odd, and I often get asked about it because sole traders cannot understand often why anyone would want to do it, but it really does seem to add value.

There are a number of reasons for this, with the main one being how much easier it is to sell a limited company than it is to sell a sole trader business. A limited company can be bought and sold like any other, with the new owner acquiring the shares and becoming a director, and the old owner selling the shares and resigning as a director. If you compare this with a sole trader, the sole trader needs to either take on a partner and then resign from the partnership, or arrange for the new person to come in and take over the practice on a sole trader basis.

The latter does not seem to be too problematical, but it is much easier to convert to a limited company and do a share sale.

So, the advice to convert to a limited company is because it is usually a much smoother transaction to sell a limited company than it is a sole trader. We get a lot more interest in limited companies from buyers.