My client is a small Ltd co in a start up phase. Its not making money. There are 3 shareholder ( 20/20/60). 2 of the 3 shareholders/directors want to invest £4500 into the company without affecting the shareholdings. This is to reflect that the other individual has done all of the grunt work.
I've said why not keep it as a loan and structure the loan so that it doesn't need to be repaid anytime soon. They want it to be written off into the company accounts.
How do I account for this?
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If they are adamant that they want it in the bottom half of the balance sheet you need a separate class of shares with next to no rights.
Agree with BKD
This is just daftness.
Do they want it to go through the P+L ? I don't see why they can't treat it as a non-taxable donation if that's what they want but it's not something I'd recommend.