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Help needed with company accounts

I invested into a company in  March 2017 in return for a 25% share of the business. The money I invested was going to be put back into the company to help with cashflow. To cut a long story short I became ill with depression (work related) at the end of last year and no longer work for the company although I still remain as a director and shareholder. Due to my illness I have kept away from the business, however out of the blue I received communcation from the majority shareholder informing me that the company will cease trading at the end of this year due to lack of business. I understand this but after looking at the companies full accounts for 2017 there is no record of my investment!! Should this be shown in the accounts as the money was supposedly being invested back into the business by the majority shareholders? I would be grateful for any help. Many thanks.

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17th Dec 2018 16:39

I would speak to your company accountant to explain.

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17th Dec 2018 16:40

Dunno. Tell us more.

How did you invest ?

New shares, shares bought from somebody else, loan or what ?

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to lionofludesch
17th Dec 2018 17:37

I purchased a 25% share of the company from the only shareholder (at the time) as they were looking for a cash injection for the business. This money was being put back into the company by the shareholder.

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17th Dec 2018 16:41

1.Look at Companies House file for the company and see if you are registered as a shareholder in the Confirmation Statement. If not then talk to the majority shareholder as to why not and then if still not happy talk to a solicitor
2.Your money would be included in any cash/bank balances but will not be shown separately in the accounts

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to bernard michael
17th Dec 2018 17:39

1. Yes I am registered as a shareholder.
2. Where in the accounts would my investment show?

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to Digger1975
17th Dec 2018 17:54

As a loan from the shareholder from whom you purchased the shares.

Assuming he kept his promise to plough the money back into the company.

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to lionofludesch
17th Dec 2018 18:33

There is no entry of a loan from the shareholder on the accounts. I am guessing it wasn't put back into the company as promised!!

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to Digger1975
17th Dec 2018 18:44

Where are you looking ?

If this is a micro-company, it's not a statutory disclosure no there's no obligation to report it.

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to lionofludesch
17th Dec 2018 18:59

I have PM'ed you :-)

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By 356B
17th Dec 2018 16:58

I invested into a company in March 2017 in return for a 25% share of the business. The money I invested was going to be put back into the company ...........

It sounds like you bought some shares from an existing shareholder, who (may have) put the funds into the company. None of this will show up in the accounts as anything to do with you. Check other shareholders loan balances.

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to 356B
17th Dec 2018 17:43

Yes I did purchase from an existing shareholder on the basis that my money was going back into the business. Going by the figures it doesn't seem as though it has gone back into the business!!

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By marks
18th Dec 2018 00:01

Sounds from what you are saying is that the transaction was between you and the shareholder rather than you and the company.

From the sounds of it you bought 25% of the shares in a company from shares that had already been issued to the existing shareholder.

You say that this was on the basis that he would invest it in the company but if you bought the shares from him directly and paid him personally for them then what he did with the money is up to him and he may/may not have put it into the company.

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18th Dec 2018 14:57

What you have done is exchanged cash for shares.
- your 'money in the company' is represented by those shares - not by an increase in the company's 'cash'

Those shares may now be worthless - that's the risk from investing.

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18th Dec 2018 09:34

2 more queries
1.Did you receive a share transfer form and share certificate when you bought the shares?
2.Was there a written agreement as to how the share proceeds would be used?

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18th Dec 2018 09:41

Once again, we see a situation where there might have been better ways of doing this.

If only the OP had visited the company's accountants.....

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18th Dec 2018 14:59

.....or even me, I'll be the man down at the pub tonight.

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