Share disposal - help please

Share disposal - help please

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Hi there,

I have a client who had a shareholder who was charging a consultancy fee to the company from his own company.

It was later found that the amount paid to the other company was well over the work that was carried out.

Subsequently, the shareholder paid money via settlement agreement back to the company and also relinquished their shares.

Now the invoices were never formally credit noted as such from his end, as he is VAT registered the company had reclaimed the VAT on his invoices.

How would you best treat this? As technically the shares were transferred to the other shareholder and money has gone in the company account.

Any help would be massively appreciated!

RJF

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Euan's picture
By Euan MacLennan
21st Apr 2015 13:57

Share disposal?

You head up the question as "Share disposal" and then, say that the shares were "relinquished" and transferred from one shareholder to the other.  This is not a buy-back of shares and hence, there is no transaction to be recorded in the company's accounts.  You should make the appropriate entries in the register of members.

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