Starting up a company - what do I need to invest?

[chris79]

Right,

I've been on the phone to various places to get an answer to this but so far fallen short of getting the answer I need.

I started my limited company up on 3rd April 2007, and the shares are split as follows:-

myself - 500 @ £1
partner - 500 @ £1

Does this mean that with the valuation of the shares, we should both be expected to put £500 each of our own money into our business bank account to start the business up?

[Langkawi]

My understanding of this is that you both technically owe your company the money for the shares.

Whether or not you choose to pay the money in or not, at this point in time is up to you.

Unless, you as director, are going to be hardnosed and sue, you as shareholder for the monies.

Didnt mean to be too flippant but it is friday. Perhaps someone more qualified can explain what happens to the moneys if you pay them and if you don't. Is it an expense etc?

Cheers,
Alan

[Bluebird]

Starting up a company - what do I need to invest?

You need to invest in an accountant.

[Cowboy Bob]

My understanding of this is that you both technically owe your company the money for the shares.

My understanding is that in reality you owe the company money for the shares and this has to appear at year end on the company's books. This is why I started my company with 1 share at £1.

[Sockpuppet]

Share capital is listed on the balance sheet as a long term liability.

Basically you owe the company the money which is where the "limited" part comes from. If the company folds you cna be held accountable for that money. But only the value of the shares (@ £1 each) so they can only take as much as the value of the shared from you. So £1 of it for me or £1000 for you. You don't have to pay it just note that you owe it.

Also regarding S660 you may want to verify how those shares are split. There are heaps of threads on it.

[chris79]

yeah I've been reading about S660 ... My partner is the company secretary, but she also works on a seperate contract and money is paid into the business, so I see no reason why the taxman would have an issue with this, I don't think there is any tax benefit to be made because i'm not a higher tax earner, and neither is she.

[ASB]

yeah I've been reading about S660 ... My partner is the company secretary, but she also works on a seperate contract and money is paid into the business, so I see no reason why the taxman would have an issue with this, I don't think there is any tax benefit to be made because i'm not a higher tax earner, and neither is she.

Ok, but there is a potential tax benefit in that if all the income were assessed to one of you, or assessed to both of you in the proportion of fees billed then one of you might be a higher rate payer.

However, if it is a joint venure and both of you are billing something broadly similar I don't see a problem. but watch Arctic.