A sole proprietorship is an established and registered in accordance with the Law business activity, which consists of self-employed business of unincorporated enterprise.
The characteristic feature of conducting such form of business is that entrepreneur remains liable for all obligations, and the its name includes the last name of entrepreneur. All that features make impossible to sell the whole business in a commonly shared view.
One possible solution is to sell all the asset of the entrepreneur, sign an assignment agreement (transfer of ownership), and then liquidate a sole proprietorship. The buyer, in turn, should register his business and buy assets from the seller. Such a complicated procedure is related with the situation that the entrepreneur running single-handed business is the owner of the assets as an individual, it does not belong to the company.
Therefore, in order to facilitate the process of transfer the ownership, and the sale of the entire business, including intellectual property, it may be turned into a limited liability company and sold comprehensively. The procedure of transformation is to change the legal form of a legal entity. As distinct from the sole proprietorship, the LLC owns all the property, belonged to firm, a liability is limited to the amount of the share capital, and contracts are valid even after the change of shareholders and the Board of Directors.
The transformed company acquires all rights and obligations of the transformed activity, as well as all licenses, permits and concessions, unless otherwise provided by law.
In order to transform it is necessary to prepare a balance sheet, a financial report, as well as to make a transformation plan containing a valuation of the business assets, which should then be analyzed by the auditor. The request for conversion is also accompanied by the conversion statement and the company agreement. You should be aware of the obligation of paying civil law activity tax at the rate of 0.5% of the share capital. After the conversion procedure is complete, you should remove a business (a sole proprietorship) from the register CEIDG.