1 x £10k

why?

Didn't find your answer?

Other than bad/no advice, can anyone think of a genuine reason why a one-man-band ltd would have 1 x £10k Ordinary share?

I'm wondering about capital losses if the company fails? But if there was a £9,999 loan that was lost there'd be capital losses wouldn't there?

Replies (23)

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By Duggimon
02nd Mar 2021 14:13

It is almost definitely someone who was starting a company, was putting in £10,000 as start up capital and thought it had to go in as shares, I really don't see any actual benefit unless it's to make the balance sheet look £10K healthier.

Even then, why one £10K share? Why not 10K £1 shares?

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Replying to Duggimon:
ALISK
By atleastisoundknowledgable...
02nd Mar 2021 14:23

Duggimon wrote:

Even then, why one £10K share? Why not 10K £1 shares?

I assumed it was 10k x £1 until I got looking into the incorp docs!

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Replying to atleastisoundknowledgable...:
Flag of the Soviet Union
By thevaliant
02nd Mar 2021 15:10

They've just confused number of shares x value and done the whole lot.

Did they really intend to do 1 X 10,000 shares anyway? Most small traders do £100 and never pay it anyway (but write it off for CT purposes later through the P&L).

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Psycho
By Wilson Philips
02nd Mar 2021 14:42

atleastisoundknowledgable... wrote:
But if there was a £9,999 loan that was lost there'd be capital losses wouldn't there?

Yes, but a loss on shares might be more useful.
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Replying to Wilson Philips:
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By Paul Crowley
02nd Mar 2021 17:30

Agreed
Loss on share is income tax
But there would need to be income tax to set it against

Covered in tax talk video on Any Answers linked to an earlier thread on same issue.
They even had the cheek to read my comment (on earlier thread) and disagree with me.

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blue sheep
By NH
02nd Mar 2021 14:49

I can think of good reasons to have £10000 share capital but no good reason to have 1 10k share

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Caroline
By accountantccole
02nd Mar 2021 14:58

Any French connections? - they're obsessed with "high" capital over here!

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Kitten
By Hazel Accounts
02nd Mar 2021 15:17

Very odd.
I assume if they want to the Company could subdivide the share into many shares (no idea which form to use but sure there would be one, and presumably needs some sort of resolution, minutes etc)
Then I seem to remember from my studies a company can buy back some of its shares to release capital but fairly sure there's several conditions for that and really can't remember the process.
So it depends how much of a problem it is for them and whether it's worth paying you to sort it out.
Of course they could subdivide to enable transfers to other people (family?) without doing the buyback which may be useful in itself.

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By Tax Dragon
02nd Mar 2021 15:20

Is this just this conversation rehashed?
https://www.accountingweb.co.uk/any-answers/director-loans-can-i-get-a-s...

Better balance sheet can have value. Skin in the game (DJKL's comment in that thread).
I'll stick with my horses for courses.

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Replying to Tax Dragon:
blue sheep
By NH
02nd Mar 2021 16:23

Tax Dragon wrote:

Is this just this conversation rehashed?
https://www.accountingweb.co.uk/any-answers/director-loans-can-i-get-a-s...

Better balance sheet can have value. Skin in the game (DJKL's comment in that thread).
I'll stick with my horses for courses.

This is Giles and Tims favourite subject, their advice goes along the lines of, if you have 10k to start your company, make that share capital instead of a DLA, that way if it goes pear shaped you get income tax relief and if it turns out well and you want the money just reduce the SC, best of both worlds.

In reality the majority of clients I come across start a company with little or no capital and lend the company money later on if they have to

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Replying to NH:
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By Paul Crowley
03rd Mar 2021 11:22

Agreed
All dead straight forward if you know exactly what you are doing and all the various nuances

Real life tends to be a bit different as clients do what clients think suits them with disaster planning not the exiting bit of the new business

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By Crouchy
02nd Mar 2021 15:54

possibly just a flash git wanting to say they own a £10k share......have seen similiar situations

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John Toon
By John Toon
02nd Mar 2021 17:36

£10k is the minimum capital requirement for a FCA regulated business so may be because of this. It's the only reasonable excuse!

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Replying to johnt27:
ALISK
By atleastisoundknowledgable...
02nd Mar 2021 19:54

I think we may have a winner!!!

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A Putey FACA
By Arthur Putey
02nd Mar 2021 18:03

Are the shares fully paid?

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Replying to Arthur Putey:
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By Tax Dragon
02nd Mar 2021 18:06

Better than Groucho - made me laugh out loud.

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Replying to Tax Dragon:
By Duggimon
03rd Mar 2021 11:17

Are you referring to Arthur's avatar? Because if so I am ashamed for you. If not I suppose I'm ashamed for me for doubting you.

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Replying to Tax Dragon:
A Putey FACA
By Arthur Putey
03rd Mar 2021 11:25

Not sure I get the joke

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Replying to Arthur Putey:
blue sheep
By NH
03rd Mar 2021 11:32

Arthur Putey wrote:

Not sure I get the joke


It's not just me then, way over my head
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Replying to NH:
ALISK
By atleastisoundknowledgable...
03rd Mar 2021 11:43

Me three

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Replying to atleastisoundknowledgable...:
Stepurhan
By stepurhan
05th Mar 2021 11:12

I think I get it.

The joke is Arthur believing that someone dumb enough to have one £10k share is also too dumb to realise they have to put that money into their company to pay for it. The Groucho part is just an arguably appropriate choice of comedian.

Am I right TD?

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Replying to stepurhan:
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By Tax Dragon
05th Mar 2021 11:51

I'm sure that's funnier than whatever I meant, so let's go with that. (I'll stick with waffle and lace in future; I'm obviously worse at jokes than I am at property law.)

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By Rgab1947
05th Mar 2021 10:59

Think it was finger trouble when starting the company. Probably meant 1 x £1.00 share.

Lousy keyboard can easily add a few zeroes. Hence I spend a fortune on keyboards that do what I want.

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