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Reply to: Using Company money to invest in startup
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Previously on "Using Company money to invest in startup"
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Originally posted by Gaz_M View PostThanks but this is where I get lost.
If company A is say, 10k in profit and loans company B 5k to get started, then company B fails isn't company A still operating in profit and can therefore still pay dividends? What happens to the 5k that company A has lost in terms of reporting it?
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Originally posted by Fred Bloggs View PostYes, it means no dividends can be paid while company A is trading at a loss. Dividends are paid out of profits.
If company A is say, 10k in profit and loans company B 5k to get started, then company B fails isn't company A still operating in profit and can therefore still pay dividends? What happens to the 5k that company A has lost in terms of reporting it?
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Originally posted by Gaz_M View PostGood detailed response - thanks.
What I meant was how is the loss reported in Company A's accounts? Would there be any further implications for the director of Company B?
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Originally posted by youwhut View PostRegister Limited Company B.
Loan the money from Limited Company A to Limited Company B.
Serious question because I am thinking of doing the very same thing.
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Register Limited Company B.
Loan the money from Limited Company A to Limited Company B.
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Using Company money to invest in startup
Hi All,
This is my first post so bear with me.
Basically I want to set up a new company with a family member, This new business will have nothing to do with my current IT consultancy (It involves selling hand made products online).
My question is can I use some of the money I have sitting in my company to invest in the new company with out have first to draw it out and pay tax on in. In a nutshell the company will own part of the new company?
This is not an attempt at a tax dodge, I just want to find the most effective way to start up the new company.
Thanks in advanceTags: None
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