On the 9^th April 1932, Yelloway Motor Services Limited, emerged from the remnants of Holt Bros (Rochdale) Limited, who had been trading since 1915 but succumbed to financial difficulties in the depression of 1930. A new board had been formed in 1931 to take over the business from the former owners, and, since many of the former Holt Bros vehicles had been repossessed by the creditors, the new company had to arrange to repurchase some of them. In addition new vehicles were ordered, the first to arrive was a Vulcan Prince, which was delivered in time for the 1931 summer season. In 1932 the fleet continued to be modernised with the arrival of a number of new coaches. An interesting feature of this period was the variety of liveries employed. A Tilling-Stevens coach received a chocolate brown and burnt sienna livery; an AEC Regal was finished in an all-orange livery with cream relief; another AEC Regal carried a navy and light blue livery with cream relief, as did two subsequent Leyland TS4's and the only delivery of the following year, a Leyland Cub. It was not until 1935 that the Company made a return to the orange and cream livery that was to form the basic livery for the remainder of its independent life.

The next major obstacle to the company came in the Traffic Courts. The introduction of the 1930 Road Traffic Act took licensing out of the hands of local authorities and placed them with the Traffic Commissioners, who had the task of deciding which operators were entitled to run which route. This led to many strange decisions, and annoyance amongst some of the more established undertakings when licences were denied. Yelloway had been granted licences to operate their London service from the Fylde Coast and from Manchester (with a connecting feeder service from Rochdale via Shaw, Oldham and Hollinwood), but licences were not approved for the section via Blackburn, Accrington and Rossendale. Eventually, however, through the persistence of their directors, most of the former pick-up points were licensed.

Yelloway was also granted operating licences for the service to Torquay, which were denied the large combine operators. As a result they were approached by North Western Road Car Company over a possible sale, but terms could not be agreed and the company remained independent. Subsequently both Red & White and Ribble offered to purchase the company, but once again terms could not be agreed.

In 1932, approval was given for the continued operation of the Rochdale to Manchester express that had started in November 1927, although certain protective fares had to be applied and Chadderton had to be dropped as a stopping place.

By 1937, Yelloway was providing travel facilities for passengers from West Yorkshire to destinations in the southwest, connecting services being provided by Ripponden & District through Halifax, Sowerby Bridge and Ripponden to Oldham where they joined the Devon bound coaches.

The onset of World War II caused the curtailment of a number of services, including the London express, which was suspended for the duration. Contract work was undertaken to the A. V. Roe works in Chadderton and resulted in a number of additional vehicles being drafted into the fleet, including a Daimler CWG double-decker, used on the Rochdale to Manchester service, which continued to run throughout the war. Due to extra wartime traffic, this route proved to be more profitable now than it had been in prewar years. The Traffic Commissioners temporarily approved additional stopping places, including Chadderton, which had been denied in the 1932 licensing.

In 1944, one of the board members, Maurice Edwards, who had helped to finance the restructuring of the new company, indicated his desire to dispose of his stake. In order that no additional borrowing was undertaken, which may have put the company into debt; it was decided to dispose of the Manchester to Rochdale service. On the 18^th June 1944, the service was sold to Manchester, Rochdale and Oldham Corporations, along with a number of vehicles.

Yelloway Motor Services now awaited the cessation of hostilities and the opportunity to concentrate on the nationwide express network it had built up.