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Post Info TOPIC: Accounting for the sale of shares in Limited Company
Kitty37


Senior Member

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Accounting for the sale of shares in Limited Company
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Hi - I have a client operating as a limited company with 100 £1 shares owned 50/50 by the two directors. One of the directors is resigning and the company is buying back his shares at a price of £50,000. The remaining director is then intending to purchase those 50 shares for a nominal value - probably £50. 

I would like some advice regarding the accounting for these shares to make sure that the sale and subsequent purchase is correctly recorded. Many thanks in advance.



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Cheshire


Master Book-keeper

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Hi Kitty
Sorry - I dont know your background so unsure if you are just asking what the double entry is, or further far reaching questions. Has your client had an accountant advice on this plan and covered off the necessary tax and legal implications and requirements?

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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
Kitty37


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Hi - my client has taken advice on this plan yes and it is therefore just the double entry that I want to ensure I get right.



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Cheshire


Master Book-keeper

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Posts: 8646
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Hi Kitty
So are they funding this entirely out of their own reserves?

__________________

 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
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