Shares for Services

Shares for Services

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I currently have a client who has issued share capital at Companies House and recorded that Share Premiuim has been paid. Upon closer inspection, it conspired that no cash had been transferred and the explanation given was that it was 'shares for services' with the share premium being the value of services provided to the company by the investor. Is this allowed?

I'm just wanting to know the tax implications and the accounting treatment for this.

Do I place the services 'cost' in the profit and loss with the corresponding entry going against share premium?

Or should the shares even show a 'premium' in the first place. Should they have just been issued at a discount - i.e. par?

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By johngroganjga
24th May 2018 16:23

If the company had paid the investor a cash sum for the services he provided and he promptly paid it back as consideration for the issue of new shares to him, how would you have accounted for those transaction?

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