Hello
My new client has set up a CIC limited by guarantee which is a continuaton of her unincorporated association.
There is some cash in the bank which has rolled over into the CIC and there is also other assets (nothing major - office equipment: printer, desks, chairs etc) which are being used by the CIC.
1. Does anyone know the procedures to be followed for the assets to be transferred?
2. Double entry for the asset transfer?
Two of the members of the unincorp assoc have become directors, and there is 2 new directors.
Thanks
Leigh
Replies (4)
Please login or register to join the discussion.
Hello
1. Does anyone know the procedures to be followed for the assets to be transferred?
2. Double entry for the asset transfer?
Thanks
1.Usually a sale & purchase agreement, detailling the assets (and liabilities?) to be transferred and any consideration paid
2. If there is a value associated with the assets transferred then probably Cr Donation Dr Assets (FF&E or bank/debtors) as appropriate
Hi Leigh,
I'm sorry to resurrect this old conversation, but I am facing this exact scenario.
What did you decide to do in the end?
I have a bank balance to bring into the accounts, but I don't want to just credit it to Donations, as they will then be paying tax on income earned prior to incorporation.
Do I somehow bring it in as a starting equity item, maybe as members funds introduced, if there is even such a thing?
Or do I ignore the fact that it was an IO and bring it in as a directors loan account, although I don't think that is right either as some of the money is grant income received previously?
Any help or suggestions gratefully received.
Apologies for the same from me.
What did you do in the end, hmwhiteca? I have an unincorp. assn I'm working with (as an unqualified charity treasurer) that is about to do the same thing.
My suggestion is likely to be an interest-free loan from the member/director that the CIC slowly pays down, and she gift aids the repayments away (since she doesn't want to benefit personally). But I'm an amateur, so would be interested in the solution you came up with.