Hi Pwi.
There is no simple answer to this question. Why would someone want to switch to limited liability when they are not allowed to incur credit anyway while in an IVA? There should be no liability to switch.
By incorporating, the debtor will find his statutory obligations and accountancy fee increasing for little or no benefit. If it is a case of trying to minimise tax liabilities there is not much of a difference between a sole trader and a sole director/shareholder.
If an accountant has recommended the switch for tax purposes the articles of association and Table A will need to be checked as the existing insolvency could create problems for the director.If the person in the IVA is not to be a director then he/she should not be seen as a shadow director.
Speak to the Supervisor of the IVA and explain what is proposed and why. It may not be the best advice t incorporate while in an IVA but could be something to consider after the IVA has been discharged.
