Hi,
I've just started a new business and after a recommendation, spoke to an accountant who didn't seem knowledgeable about a lot of things which as a student taking a unit in Finance already knew, so I decided to incorporate the company myself whilst looking for another accountant. I've wrongly put the share capital down as £5000 instead of £100. I'm the sole shareholder, I'd prefer to have the share at £100 and the balance £4900 as capital loan. Is there a way to change this please? or is it easier to dissolve company and register another. I've not started trading yet.
Thanks for reading.
Replies (6)
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If you mean you have incorporated online with 5000 £1 shares, then yes I would just bin it and start again.
However I think you need to take several steps back from that too. You have not started trading, why have you formed a company in the first place?
ie is this even the right business structure for you? If you are just testing the business model then ordinarily you would do this as a sole trader, and then incorporate way down the line when its actually making decent money, not in the startup/testing phase.
Rule of thumb, if you are not big enough for an accountant then you are not big enough for a limited company.
Reduction of capital
It is perfectly possible to repay share capita. You can follow the reduction of capital rules (CA2006 ss. 641-644 & the Companies (Reduction of Share Capital) Order 2008, SI 2008/1915) and repay any of your company's share capital that it no longer needs. Only the amount originally paid for the shares (including any share premium), can be repaid. The procedure requires a special resolution and a solvency statement (in the prescribed format) which must be signed by all the directors. Accompanying the solvency statement there must be a declaration by the directors that they have complied with certain procedural matters in relation thereto. These documents must be sent to Companies House along with the resolution and form SH19. There is also a fee of £10 payable.