Hi Nick,

Again allow me to throw layman's question, what exactly does the below b/s express?

Can it be interpreted that the £2 issued share value was offset by £2 loss of operation carried over from the previous period, which resulted in no capital in the company?

Capital and reserves

Called up share capital:                                       2

Profit and loss account:                                     (2)

Shareholders fund:                                            Nil

Appreciate your assistance.

Best regards,

Vinci

Hi Nick,

No, there is no physical assets & liabilities now.

In our last annual return, 2 issued shares are recorded as Paid Up, so yes there is supposed to be the actual value of £2 (honestly speaking we don't have any memory of £2 payment to the company bank account for this though we somehow reported like that when we filed the annual return) 

What concerns me here is:

- Can I show zero share capital (shareholders fund) in the balance sheet while claiming it's an existing company? In other words, can the company be kept registered in the Comapny House without actual issued-share (our company has 1,000 authorized share capital with £1 each, and issued only 2 shares which is now being withdrawn by this transaction in the B/S, correct)?

Again, appreciate your assistance on this basic issue.

Thank you.

Vinci

Dear Figurate,

Many thanks for your answer, understood.

Regarding the trading, I haven't finalized my latest business plan means not yet defined how quickly we can resume real trading.

However, yes we intend it to be going concern and surely don't strike-off but keep registered in the companies house as active or dormant status.

Now I'm wondering my next account, so my question is:

assuming

- I file the account with the above b/s this time

- I file annual return with the current SIC code rather than 9999 dormant code

- there is no trading activities in this period

can we still just file the exact same b/s in the account next time?

Thank you for your advice again.

Best regards,

Vinci

Dear Figurate,

Yes, you're absolutely right.

Thank you for all your assistance.

Have a Great Day!!

Best regards,

Vinci

Dear Louise,

On this occasion, let me express my gratitude for your excellent guidance behind the scenes (by private mail), which helped me a lot.

Thank you again.

Vinci

Hi Shamus,

My bad, it's a good point.

I sent my private e-mail to Louise directly because I was wondering if addressing to her real name of "Louise" rather than "Figurate" in public forum somehow made her feel uncomfortable.

However, fortunately it wasn't the case and could receive the answer from her, the below is its extraction of relevant part of this topic for forum readers - I'm sure Louise doesn't have any problems with this publication:

The only thing I was going to say was that your balance sheet added up mathematically ;)

I couldnt actually say whether it was correct or not, or whether there would be any problems with it, as I have no idea if you actually had £2 in the bank/petty cash at the date of your balance sheet (which is effectively what you are saying) and whether on examination of your actual records the accounts & notes you presented in your post is a true and fair view of the events and position at the balance sheet date.

I was also going to say that you may also want to check the grammar in your notes (which I didnt want to write on a public forum)

Have a look at the sample accounts (bizarrely on the HMRC website, as opposed to Companies House)

http://www.hmrc.gov.uk/ct/online-sample-accounts/index.htm

There are links to various samples (eg full accounts, abbreviated accounts etc) near the bottom of the page.

This will give you an idea of what is expected (although its not exhaustive)

You dont mention anything about Corporation Tax, but if the company wasnt dormant, then its usual to send a full set of accounts to HMRC along with the CT600 (Corporation Tax Return).

Hope these will be helpful.

Best regards,

Vinci

Hi Shaun,

Just to say, sorry this thread went off-forum.  Although, it was for the genuine reason which Vinci has already explained.  (Actually, I'm quite touched that someone was that worried about causing offence - even if it was unfounded, lol)

As it happened, I didn't particularly feel that I had anything additional to say (which is probably evident from my reply to Vinci's email  )

@ Vinci - I'm glad I was of some help, all the same, and I hope you've managed to sort it all out now.

Louise

Hi Louise,

Unfortunately, Im struggling with a new issue.

In fact, your CT600 reminder made me think about the consistency of 2 different reporting (to HMRC & Companies House).

For HMRC, I already confirmed that they have recorded the company as Dormant, thus we haven't received Notice to Deliver from them.

For Companies House, although I started this thread by saying In fact, there was no trading activities in this accounting period though given the fact that the last-filed accounts were small company, abbreviated accounts, exempt from being audited which is not dormant accounts, therefore the status is "trading" and I need to file by using the abbreviated accounts template online., on my second thought, I realized that the trading status doesnt impose me to file only the active account but I can file dormant account alternatively I must have misunderstood the Company Houses guideline.

Having said, I prepared the dormant company account yesterday in paper form - AA02 is only available form related with dormant account in webfiling and this form can be used only by the company that never traded since inception, thus for us who becomes dormant after trading should use paper form we can use the sample in HMRC that Louise sent, and mail to the Companies House (just information for everybody).

However, again I started wondering if we can really consider this as dormant because yes we didnt do any trading but we wrote-off the bad debts by making the loss account in the previous period nil, which is the transaction in P/L account.

Thus I re-checked Companies House GP2 Chapter 8 (copied & pasted as below) to make sure what Im doing is right, but the above write-off of bad debt is not included as disregard transactions, and its not clear the write-off could be viewed as a significant accounting transaction, so I just sent my inquiry about this point to Companies House.

1. What is a dormant company?

A company is dormant if it has had no 'significant accounting transactions' during the accounting period. A significant accounting transaction is one which the company should enter in its accounting records.

When determining whether a company is dormant you can disregard the following transactions:

• payment for shares taken by subscribers to the memorandum of association;
• fees paid to the Registrar of Companies for a change of company name, the re-registration of a company and filing annual returns; and
• payment of a civil penalty for late filing of accounts.

I just received the response and the conclusion is they cant provide the answer because its purely an accounting issue, the extraction is:

The primary function of Companies House is that of a Registry; documents are received in good faith.  It is the responsibility of the company submitting its documents to ensure that the information contained therein is truthful and accurate. Accounts are processed subject to examination policy checks, in accordance with placing them onto the public record. When Companies House examines accounts it only make basic checks on them, for example to ensure that the appropriate documents are there, that they are for the correct financial year and that they have been signed. If, subsequently, we receive a complaint that the accounts do not comply with the Companies Acts in some way we have a duty to draw this to the companys attention and, if appropriate, to ask for a set of revised accounts which do comply with the requirements.  The GP2 booklet provides basic guidance only.  Unfortunately, this is not some thing that can be answered by Companies House.

To me, there are 2 options:

1. Submit dormant account in paper form assuming the write-off activity is not a significant transaction, then perfect consistency with the dormant reporting to HMRC.

2. Submit abbrebiated b/s (not dormant) via webfiling (the most convenient way) and will submit dormant account for the next account (assuming no trading activities this period), without any particular notice to HMRC because there is virtually no tax related reporting matters.

Could you finally shed light on this point?

Probably, the case I have posted in this thread is unique but still believe it informative & helpful for many forum readers.

Appreciate your assistance.

Best regards,

Vinci

Hi Louise,

This discussion gives me the valuable opportunity to review my current accounting details & what I have actually done, and I feel I am doing wrong accounting procedure with probably unnecessary objective of making the b/s clean (just leaving share capital).

Honestly speaking, we didnt do anything during this accounting period, the below is the exact situation:

-          Originally, I said I withdrew all the cash at bank though there had been no cash at bank but only in hand, virtually we didnt do anything for the cash

-          Bad debt as an administrative expense is a part of the loss in P/L account, and the loss is in Directors current account which is in Creditors in B/S, and physically I didnt do anything on the bad debt

Having said, would you foresee any problems if I file the account that is exactly the same as the previous period as a dormant account please see the below B/S I shared in my 1^st post, and if its ok, what would be the problems if I keep filing the same account until I resume trading?

Current Assets

Cash at bank in hand:                                      50

Creditors (amounts due within 1 year):            (800)

Total assets less current liabilities:                 (750)

Net Assets:                                                £(750)

Capital and reserves

Called up share capital:                                   2

Profit and loss account:                                 (752)

Shareholders fund:                                       £(750)

Appreciate your assistance.

Best regards,

Vinci

Vinci said:
"Originally, I said I withdrew all the cash at bank though there had been no cash at bank but only in hand, virtually we didnt do anything for the cash
Bad debt as an administrative expense is a part of the loss in P/L account, and the loss is in Directors current account which is in Creditors in B/S, and physically I didnt do anything on the bad debt"

LOL, I think we may be in danger of going round in circles here  Of course it's a VERY good idea to be consistent with HMRC and Companies House, because that opens up all sorts of questions, the obvious one being - why the difference?? In light of your new information, possibly the company was dormant.  But only you know what you have or haven't done, iyswim

So, to recap what I've already said:
"If your balance sheet is completely unchanged by the time the next set of accounts is due, then there is no reason why you can't file exactly the same figures. (To do otherwise would be wrong, surely? :)"
and
"I couldn't actually say whether it was correct or not, or whether there would be any problems with it, as I have no idea if you actually had £2 [which you've now amended to £50] in the bank/petty cash..." etc