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New company: initial capital vs upfront expenses

How do I go about the upfront expenses of a new company in practical as well as accounting terms?

Hi there,

I have just registered a new Ltd company, we are two shareholders and we created the company with £2 (£1 each) of initial capital. 

We are producing (and will be selling) online training courses, which means we will see expenses only for the first 3-6 months which we will (hopefully) recover in the next 6-12 months. How do I go about it in practical as well as accounting terms? The initial capital obviously won't cover it. I do not want a bank loan though, I have enough savings to cover up the expenses.

Can I give the company a loan (as an individual)? Or do I just put in on a credit card - but that's essentially a loan ...  

I appreciate this may be a rather trivial question.

Thank you.

Veri

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By DJKL
17th Apr 2018 10:19

1. Discuss with fellow shareholder who is funding company, is it just you or is he/she contributing and how much each is commiting.

2. Go see an accountant, he/she will listen to what you are trying to do and advice you re accounts/tax treatnent of the expenditure, especially presuming you are creating a website that delivers the training.

3. Having said the above, you probably ought to have discussed with an accountant before creating the company, there might well have been better flexibility say setting up as a partnership or an LLP in case business does not take off/losses arise, a company will trap the losses (if there are losses)

Thanks (2)
17th Apr 2018 23:15

Yes you can lend the company the money it needs to cover the initial expenses.

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