An Ltd company doing consultancy with 1 owner being also the sole Director of the company (hence the operating model is pretty straight fw: fee income/dividend payment).
The Ltd has been setup with 1 ordinary share for 1GBP. Model articles used, all share capital should be fully paid up.
1st accounting year closes after 18months now, and the owner has forgotten to pay the 1 pound into the company's bank account in the beginning, and yet it must be shown as paid up, to be in line with the articles (Annual return also submitted already).
However, the the Companies house fees of 15 GBP were paid from the owner/dicrector's personal bank account.
Later cash flows affected P&L account: Fee income received from Customer and paid out to the owner as Interim dividend (SA submitted this January by the owner and dividend vouchers prepared) -- so I thought I cannot use those cash flows in consideration of the share capital payment.
If I book the 2 below steps, can I lawfully consider the Share capital being paid up, even if it actually didn't hit the bank account of the Company?
Proposed booking steps are:
1. Debit Receivables from Shareholders GBP1.00 Credit Chare capital GBP 1.00
2. Debit PNL Incorporation fee paid to Companies House GBP 15.00 Credit Receivables from shareholders GBP 1.00
Hi ???? So hows about an intro before we start. We always ask newbies!
Usual stuff - what prof body do you belong to, do you work for yourself or in a practice/ firm, are you a bookkeeper or accountant, what qualifications, how long in role, where up to in your studies-what exams passed/with what body/in midst of doing, where based, what you did before this role? Where are you based? What software are you using - for bookkeeping, the accounts and CT? That so of thing. Helps get to know you but also how best to pitch answers.
Or is this your own consultancy company and if so - what kind of consultancy work do you provide and to whom (sector)?
Cashflow affecting the P&L?
The incorporation fee is before the company existed.
Did the company actually make enough profit to pay the divi after CT comps and disalloweds?
Can you add your first name to the signature bar so it appears on your posts so we know how to address you rather than 'oi you' or '????' - you can do this via edit your profile.
-- Edited by Cheshire on Sunday 14th of May 2017 03:03:56 PM
__________________
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
ok, didnt know i need to introduce myself, but happy to do so.I am Krisztina.
I am not a pro and dont belong to any prof body. I worked some years ago as an accountant in Luxembourg on investment holding companies which are not complicated to do, so just copying my past experiences now, not necessarily 100% accurately but my purpose is just to survive for now. The company in question is mine, doing finance/accounting/consulting services. When I set it up, worked here with a local accountant for a while but the relationship went bust due to overpricing and lack of delivery and after that decided not to look for another one but just doing it myself. in the meantime also got a perm job so the company is sort of on hold, but not dormant and has neglected to do the accounts in time, and now I am under pressure.
I don't use softwares just the old good excel files - since my operating model is very simple, I didn't think I need a software. basically I have only fee income, paid myself dividends only and just have a few regular expenses. no personal allowances used not to complicate things. I can use some exemptions as i am a micro company. I use HMRC online services to submit returns. Need to deal with the CT form separately, will use whatever HMRC offers, but first need to quick fix my accounts and clarify this share capital issue as it worries me and don't know how seriously it is taken here in the UK (lux allowed some shortcuts).
I made enough profit to pay dividend (did the math ahead).
I hope the above helps. Could you please help me and clarify what qualifies for paid up capital and whether I can use the proposed shortcut in the books? (I would like to avoid any self-revision of the dividend payments and SA)
...I cannot bring the incorporation fee into the company's accounts here in the UK? Lux allows it...
what I meant under CF affecting the PNL is that I had to recognize all incoming and outflowing cash int he P&L account and cannot allocate any part of it as settlement of the Share capital.
Hi Kristina No the incorp fee is not a business expenses - by its very nature, incorporating the company must happen when it does not yet exist. Accordingly, it is for the benefit of the person asking for the company to be incorporated, not the company itself. So you cannot include the fee.
Just DLA the £1 re the shares, which Iam presuming from your cashflow comment means that the DLA will then be overdrawn. Clear that post year end.
Edited to sort out my dreadful typing!
-- Edited by Cheshire on Monday 15th of May 2017 01:04:37 PM
__________________
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
