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?
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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?
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).
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.
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.
I can think of good reasons to have £10000 share capital but no good reason to have 1 10k share
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.
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.
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
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
possibly just a flash git wanting to say they own a £10k share......have seen similiar situations
£10k is the minimum capital requirement for a FCA regulated business so may be because of this. It's the only reasonable excuse!
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.
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?
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.)
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.