I've got a case where an unincorporated amateur football club has incorporated itself as a company limited by guarantee (CLG), with all assets & liabilities being transferred from the unincorporated association to the CLG.
There is no money changing hands so effectively once the net assets of the unincorporated association have been transferred to the CLG I am left with a credit balance in the CLG equal to the accumulated funds as shown in the Associations final accounts.
My question is the correct treatment of that credit balance in the CLG - is it (a fairly large) loan owed to the old Association that will just sit there forever?
Or could it be credited to reserves which would give a more accurate balance sheet - & if so what would you call it?
Any help appreciated