Its lease obligations is its financial obligation to the next date when the lease may be terminated in terms of the holding over of the lease (what I would call tacit up here in Scotland (one year in our case), so if lease term was say 28 September and year end is 31 December and annual lease is £10,000 p.a. then 271/365 x £10,000)
No idea if lease obligations are needed to be disclosed under FRS105 as I generally do not do FRS105 accounts
Harsh but fair, man or woman he don't care, time for Lone Wolf being harsh but fair.'
Re 2 what may happen to a trading company which uses part of its funds to lend to A N Other SPV Company, is it still a trading company?
It may be but it also may not be.
Re 1 i have never had the SIC code issue re borrowing within a company re investment property but perhaps that is because we tend to borrow on a portfolio basis rather than on a property by property basis , albeit these days we no longer really bother with residential property, having sold all but one of them.
ER relief re the trading company being maybe prevented from claim in future possibly springs to mind as a downside, but given presumably happy to have trading company for next fifteen years, and pay costs of running the trading company for that long, maybe not a consideration.
Would certainly be asking client what his intentions are re the trading company as if say expected to say pack up in ten years he will possibly have accountancy fees for five further years until the loan is repaid (though of course it might get repaid faster or slower)
Why does he want the property in SPV limited company in the first place, is it merely tax relief on the interest driving his decision making, has he considered the costs of operating a second company etc?
If assets are not owned by TN Limited (and as it is dormant they evidently are not, it evidently did not buy the assets nor therefore owns the assets) then they are assets of T and N as individuals presumably trading as TN Partnership, accordingly they are on the line for anything done by T and N trading as TN Partnership.
One would also need to carefully consider the idea of "holding out "as TN Partnership or TN Limited
By the way I presume by "unicorporated company", in line 1 you actually mean something that is not a company, namely a partnership, perhaps you could confirm?
Is SteLacca not ex HMRC or am I mistaken?
"Just when I thought I was out, they pull me back in!"
I would get him to head to an accountant (and a solicitor) asap, at that sort of level of activity considering business structure/form at the outset is essential.
Re land registry no idea down south but up here only first registration would prompt an entry and the issue of a Land Cert, if held for a a long time the acquisition of any property could pre date the registry. Earlier properties still exist but could, up here, rest in the Sasine not the Land Register.
We only first registered most of our properties in 2016 upon changing banks (needed for standard security purposes) despite some of them having been owned by a group entity since the 1960s.
Re profit I would suspect a EBITDA set being supplied to a purchaser, and of course dividends paid could certainly wipe out profit.
Before leaping to the conclusion your client is being sold a pup I would ask them to confirm basis of accounts supplied and if a property intended to be included seek clarification where held and by whom.
"Search the register
HM Land Registry holds records about most property or land sold in England or Wales since 1993, including the title register, title plan, title summary and flood risk indicator."
The gas companies in my experience never chase you up to return so I would say it is a guess based on experience. We have two or three empties scuffing about our workshops, some have been there so long I doubt the companies they all came from still exist. >20 years.
p.s. You may be correct re company retaining title but I see the transaction more like buying a bottle of lemonade/cola in the 1960s, intrinsically you pay for the bottle at the outset and get money back if you return it. As kids living near Inverleith Park in Edinburgh we used to "borrow" my mum's wheeled shopping trolley and accumulate such wealth to buy Action Man etc accessories.
The company has no legal right to the cylinder once it is out with a customer, accordingly it has effectively relinquished ownership of the asset when it is paid for it and it leaves its control.
The company has no obligation to make payment to the customer for the return until the event of return takes place.
Accordingly can it be said the company has a legal obligation at say its year end re cylinders out with customers not at that point returned?
It has made a contractual obligation to redeem once returned but of course will at that juncture receive consideration (in the shape of the cylinder) for that obligation, if the value of the cylinder to be returned equals the sum to be paid what real obligation is there?
In effect the company sells the cylinder offering to buy it back at x price sometime in the future, there more appears to be two distinct transactions in place.