I’m currently operating as a sole-trader, but would like to incorporate next year following the advice of my accountant.
The process of incorporating in Trinidad involves dissolving the company, then re-registering it (adding “Ltd.” to the end of the company name; Similar to “LLC” as used in the States) as a firm.
My question is what would happen to any legal documents I already have under my sole-tradership’s name? Would dissolving the company also dissolve those agreements, or could I transfer them over to my re-registered firm somehow?
[FONT=verdana]You will need to get some professional advice on this, but I suspect that the answer will be that your new company will acquire all the assets and liabilities of your existing business (that is, the business in which you operate as a sole trader), and that includes all its contractual obligations.
That was certainly the case when I incorporated my business over 30 years ago, but practices might be different in Trinidad. Your accountant should be able to give you a simple answer.
He said that once the name is the same, it shouldn’t be too much of an issue unless a lawyer is seeking loopholes, but to be absolutely sure we can have the incorporated business “buy” the un-incorporated one in my accounts. Or something like that. It made sense the way he said it.
In any case, it’s unlikely to be a big problem. After all, it’s a very common situation. That said, regardless of the legalities, it would do no harm if you wrote a short letter to each of your existing clients, pointing out the change, and basically telling them that it won’t alter your relationship with them in any way.