Unpaid share capital

Unpaid share capital

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Recently taken on small ltd co - husband and wife directors. Clients already arranged formation of co with £1,000 issued share capital - ord shares of £1 each, allocated 700 husband and 300 wife.

However, no payment was actually made for these shares and would cause directors loan account to be overdrawn if debited there.10 shares allocated 7 and 3 would have served the same purpose and could easily have been debited to directors loan account as fully paid shares.

So my question is - can this be left as a separate debtor or would HMRC make the link and expect this to be taken into account for the purpose of calculating s419 tax? Co has ceased trading and directors effectively withdrawn all cash. After meeting CT bill and my own fees from personal funds there would still need to be an overdrawn loan account of £1,000 being the share capital. All reserves have been distributed by dividend already.

Or how time consuming/involved is a share repurchase? An annual return has already been submitted to Co house showing 1000 shares so can't very well prepare accounts on basis that should only have been 10 in issue and that there was some sort of mistake during incorporation - grasping at straws I know.

Any thoughts/ideas anyone?

Michelle

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By User deleted
26th Nov 2008 09:40

Petty Cash
Why not show it as cash in hand, which is effectively what it is?

Then do an ESCC17 winding up and pay it back to the directors as a return of Capital

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By User deleted
25th Nov 2008 22:19

The directors loan acoount must be credit £1,000
You must credit your fee and the corporation tax paid to the directors loan account and as there are no other liabilities or creditors then the DLA must be £1,000. Then apply for the company to be struck off under s.652a.

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