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Hi again,

Sorry this feels like a very simple question but I can't find an answer!

Our business is currently officially a partnership, not a LTD co.

I know to our customers it'll look like we're converting to a cic, but legally is that the process I need to follow, or will we really be ceasing to trade as a partnership and starting a new business?

All the paperwork I can see on the .gov website seems to assume we'll be a 'company', but I guess I don't know what's included in that definition.

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Replies to This Discussion

Hi Peter

The word "convert" is misleading. What happens is you would incorporate a CIC, and then the CIC would buy (or be gifted) the assets of the partnership and take over running its business. Yes, a CIC is a type of limited company.

Regards

James

Great - thank you! So essentially we're setting up a new entity. 

Which does raise another question... I assume it's ok to 'gift' the debt (e.g. to suppliers, start up loans, etc)?

Great - thank you! So essentially we're setting up a new entity. 

Which does raise another question... I assume it's ok to 'gift' the debt (e.g. to suppliers, start up loans, etc)?

You can generally assign the partnership's debt to the CIC but you would need permission from your suppliers, lenders, etc, and if the CIC hasn't been trading an has no track record they are unlikely to provide this.

Definitely a bit of a minefield so professional help is recommended. In addition to James reply here is a simple online resource that is a good basic read.........potential tax implications are perhaps the biggest issue. 

https://www.mercerhole.co.uk/restructuring-blog/llp-to-limited-comp...

Thank you :) 

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