Yes but get a chartered or solicitor to do it for you as it requires either a solvency statement or court confirmation along with companies house form SH19.
Considering the amount of money that we are talking about here I don't see hiring a specialist will be an issue.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I think it is correct time to give some background details that may help others in future...
The company is in an overseas TaxFreeZone and to incorporate it was a condition to have minimum 500K in share capital @1000 per share and money in the bank.. once incorporated the money can be withdrawn after a month..
two friends started it hence 250 shares each i.e 50% each.. however only one friend contributed 500k (borrowing 400k bridge loan with 5,000 interest from other friends that was paid back after a month leaving his 100k own investment in the company now)
We'll in that case the £500,000 paid up capital should stay in the company. The DLA is effectively over drawn by £400,000 now.
Thanks Yes I actually did it that way.
However I want to classify the Shareholder 1 unpaid share capital (for shareholders book) who did not contribute any money yet and shareholder2 actually paid all the 500K however he withdrew 400K to pay back to his friends?
As all the share is paid-up so I have balanced the books as below.. I hope this is OK and make sense now ;)
If you are adamant that you want to do this yourself then at least pose your question on Accountingweb. They will give you a variant on Matts answer above but they may also be willing to help you through this where, whilst no offence is intended here to anyone, I don't think that people here should attempt to answer this as its a potential very costly issue for your client if things go wrong.
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Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
They already have an accountant/auditor over there. I am only helping one of the shareholder here to get a visual picture of their financials and helping him how record daily transactions etc..
Hi
Has the shareholder who is UK based not got an Accountant? Would suggest they do get one asap.....Chartered/tax. They should also be able to give you handle on how this would look in the accounts.
Need to fully check the position in terms of the loans too, the way I understood you was that the loans were personal to one shareholder, therefore you cannot put the interest through as a business expense. If it was a loan to the business then on what basis/has the one shareholder then got the right to withdraw those funds fully.
Lots of potential 'issues' with this one.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
