After setting up your business, it's time to transfer your existing personal assets. In order to use your equipment to meet your new business's needs, you can either buy your equipment, lease it, or utilize pre-owned personal assets.
While acquiring assets you already own may sound straightforward and cost-effective, you have to follow a process prior to being able to utilize those assets. Here, we discuss whether selling your own assets to your business is possible:
Can I Sell my Personal Assets to my Business at a Glance?
Yes, you can sell your personal assets to your business. However, you may have to consider whether the converted items will lose insurance or not. For this reason, you'll have to look into your business policy.
Moreover, you may not be able to claim your asset's full value if you didn't purchase it solely for business use. You may research the price of a used asset on secondhand marketplaces.
What are Business Assets?
Business assets refer to equipment purchased to facilitate business. It further falls into a variety of different categories and subcategories. The main two types of business, however, are tangible or intangible business assets:
Tangible business assets are typically assets like equipment, machinery, vehicles, and property. These are business assets you can touch, as well as see.
Intangible business assets, on the other hand, comprise goodwill, brand reputation, intellectual property, and business databases. In simple words, these are assets users can neither see nor touch.
How to Convert Personal Assets to Your Business?
If you boast personal assets originally purchased for personal usage, it's vital you establish its current market value. Below are easy-to-follow steps on how to transfer your personal assets to your business:
Evaluate Your Assets Worth
First, you'll need to assess your personal equipment's fair market value, i.e., the amount at which an ideal customer would buy it. During the deduction process, it's vital you figure out the fair market value of your assets back when you started using them, as well as the amount you paid for each converted item.
You'll receive an accurate, fair market value through an in-depth appraisal. However, you may evaluate it by yourself by analyzing 'for sale' listings or by getting quotes from secondhand dealers.
Craft an Invoice
Now that you've figured out the exact present value of your assets, it's time to prepare an invoice. Your invoice will be from yourself to your new business and should consist of each item alongside its cost.
No matter if you use spreadsheets or a word document, the important thing is that your invoice boasts the following:
· Your name
· Your address
· An accurate and clear invoice to your company
· The invoice's date
· Each item sent
· And their costs
A plus point is if you still own original purchase receipts of the transferred items. Attach them to your company records to ensure a lack of mistakes produced.
Transfer the Money!
Last but not least, crafting an invoice, you need to transfer the total amount written on your invoice from one account to the other.