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You may wish to change company ownership because your business is expanding and you want to bring a business partner on board, transfer your business to another party, or even sell it. As we move through 2025, keeping your company records up-to-date is more important than ever.
In this article we’ll go over the steps you need to take to change company ownership in a compliant and efficient manner, with updated guidelines for 2025.
How To Change Company Ownership
- Finalise your paperwork completely. This includes settling any outstanding payments to employees, suppliers, or creditors. Ensure that all reporting obligations—such as your business activity statements—are fully up-to-date in line with the latest ATO and ASIC requirements in 2025.
- Notify and update your business records. Inform your shareholders (if applicable) and other key stakeholders of any change in ownership. Update relevant organisations such as the ATO, ASIC, and your bank. For more guidance, check out our quick tips for registering a company.
- Transfer licences, permits, leases, records, and assets (including business records, intellectual property, and marketing materials) to the new owner. Ensure all contractual documents—such as trademark transfer agreements—are properly executed and recorded.
- Cancel your business name or arrange for a transfer, and cancel the existing ABN so the new owner can secure a new one if required. This step is crucial to ensure a smooth transition under the current 2025 regulatory framework.
- If you are taking on new business partners, update all relevant paperwork to reflect the revised shareholding and management structure. A well-drafted Shareholders Agreement can help prevent future disputes.
Can You Transfer Ownership Of A Sole Proprietorship?
While a sole proprietorship is not a company structure, it’s a common question we hear. As a sole trader, there is no separate legal entity – you are personally responsible for all the profits, debts, and liabilities of the business. Unfortunately, this means you cannot transfer ownership of a sole proprietorship directly.
However, you can change your business structure into a company, and once the new entity is established, transfer ownership accordingly. This approach not only streamlines the process but also offers benefits such as limited liability and easier pathways for business expansion in 2025.
Alternatively, if you prefer not to change your business structure, another option is to simply sell your business’ assets rather than the complete business.
Changing From Sole Trader To Limited Company
Many businesses transition from a sole trader setup to a limited company as they grow. In 2025, businesses make this change to prepare for expansion, separate personal liability from business risk, better protect assets, benefit from improved tax efficiency, and to raise capital more easily or take on new partners.
Preparation Before You Register A Company
First, decide on the type of company that best suits your needs. Consider factors such as:
- Whether your business is a charity or has a special purpose
- The current size and projected growth of your business
- If you prefer a straightforward proprietary limited company versus a public company
- Or if you want a more complex structure that might include a holding company
As you can see, there are many considerations! A legal consultation with a corporate lawyer can be invaluable at this stage. Taking the time now to establish the most suitable company structure can save you future headaches. For further insights, our article on whether business structure matters is a useful resource.
You’ll also need to decide on key roles such as the director(s) and secretary(ies), understand your new legal obligations as a director and/or shareholder, maintain ongoing compliance, and select an appropriate company name. We’ve written more about how to register a company and what you’ll need here.
Registering Your Company
Once you’ve chosen the appropriate structure, here’s what you need to do to transition from a sole trader to a company:
- Register a company and secure the necessary documentation, including drafting a comprehensive Shareholders Agreement.
- Cancel your old ABN and apply for a new one; once registered, you will receive an ACN (Australian Company Number) as per ASIC’s updated requirements in 2025.
- Transfer your assets, licences, intellectual property, trademarks, and leases where applicable. For further guidance on protecting your intellectual property, see our guide on protecting your IP.
Transitioning from a sole trader to a limited company is a significant step, and staying compliant with the latest regulations is crucial. In 2025, maintaining accurate records and meeting updated ASIC requirements will help ensure a smooth transfer process. By planning ahead and consulting with legal experts, you can navigate this change efficiently and position your business for future success.
Need Help?
Here at Sprintlaw, we’ve seen it all! No matter what type of business you operate, our consultations can simplify the process considerably. Whether you need assistance with setting up your new company or guidance on transferring ownership responsibilities, our experts are here to help. For additional information, you can also explore our resources on setting up a company and contractor and shareholder agreements.
Don’t hesitate to contact our friendly team on team@sprintlaw.com.au or give us a call on 1800 730 617 for a free, no obligation chat.
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