Hi, the company was incorporated last year and the owner/director has one share at 1 pound nominal value. He later put 10k into the business. The question is can I credit the transaction to Share Premim and what legal documents/returns to Companies House will I need? I suspect the HMRC will fees Thu as donation/ sundry income, and tax it...The company must meet certain capital requirements, so the 10k cannot go to director's loan...Thank you so much for your help!
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Well, nothing can be retrospective .
The directors/shareholders need to agree to issue further shares, prepare the notices (if any) re appropriate meetings and minutes re same , fill in the companies house forms and lodge same. Starting point is the Company Articles.
Until the above is done the funds are a loan
Edit-this is a fairly simple summary:
https://www.jonathanlea.net/2014/how-to-allot-and-issue-new-shares-in-a-...
I agree with DJKL, but will add that there is one thing for sure that it can’t be, which is taxable income. You are worrying about that unnecessarily. Also your idea that a shareholder can’t lend money to a company until it has met some capital requirement is illogical.
I was thinking that the "capital requirement" might be some condition of a lender or some other third party.
As for the retrospective element, why not issue a second share at a premium of £9998 ?
Without further facts, it's difficult to suggest a definitive course of action.
But, it was surely not written off at the date of the past accounts being prepared-you surely do not have a DeLorean with a working flux capactitor.
No idea what declarations needed to FCA but generally , when in a hole, stop digging, if there was not at x time the requisite capital then there was not the requisite capital.
If this is a client you are acting for pass them to someone who knows what they are doing, if your own business get professional advice
You can’t write off the creditor’s loan - only he can. But why would he want to?
With respect you are not thinking straight. If the company is subject to an FCA requirement to have at least £5k of issued share capital and is still £4,999 short of that figure your best course is to sit down with your clients and ask whether they have any plans to meet that requirement, what those plans are, when they intend to implement them and whether they need your help in any way. With a shareholder’s loan already on the balance sheet that will probably not need to be a very long or difficult consultation.