iTak315 started this topic @ 04:16 on 25/01/2006
Hello everyone =)
I just signed up the other day and this will be my first post. I'll be studying a lot from now on by reading everyones usefull posts.I recent incorporated a company that will be doing business mainly in the music industry. I have already invested some money for promotional use, webhosting use etc from my personal funds.
Now my question is, while your fresh bank account has no funds, is everyone wiring their personal funds into the business bank account?How is this money treated as in the means of paper work - accounting?
I plan on spending more money for the company, but this money deal is becoming a dillema =/ And yes I do need more reading!!! will do.But any information would be greatly appreciated! sorry for such a LOONG post.
p.s. ANyone know how to turn the forum refreshing off? the forum page resets to Page1 after idling at a different page... probably because of the advertisements..
-Brian
RE: Relations: Personal funds & Business bank account?
Jonny | 25/01/2006 08:00 AM
I'm sure Mr James Smith will be able to give you some sound advice here.
I think a lot of people set up and fund their business a similar way.
In hindsight, I would have saved loads of time by keeping a record of everything spent and where the money came from - eg personal bank account, personal credit card, business account etc etc logged against every transaction.
These purchases gets put towards a "directors loan account" the point of which being you can withdraw when the biz is doing well without too many tax implications I think.
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RE: RE: Relations: Personal funds & Business bank account?
iTak315 | 25/01/2006 08:16 AM
Hello Jonny,
First of all, thanks for the reply. Nice to have my first post replied to. I'll make sure to keep every transaction logged onto my secure file. I read -->http://www.taxationweb.co.uk/forum/discuss.php?id=3710 but it's not helping out! I guess many people are in the same situation, ill continue my research. Thanks! And any other information would be great :-)
RE: Relations: Personal funds & Business bank account?
James Smith | 25/01/2006 09:28 AM
Brian,
Well if you have got a limited company you have no choice but to do it properly - and hopefully the first time around rather than in retrospect. Jonny is dead right about keeping records - you have to be 100% accurate in reconciling to the company bank account at the year end of your accounts wont add up which will create a headache for your accountant trying to sort it out for you.
Monies you put into the company would indeed be counted as a loan from you to the company, however it gets a lot more complicated when you want to take it all back out again in the form of profits.
I have said it before, and I will say it again, if your business is big enough to justify forming as limited company then you are big enough to get some proper professional advice to ensure you do things right the first time. You cant just fix it all at the year end like you can with self employment. To deal with this I offer a fixed fee "get you started" package to owners of new companies to get their heads around all the principles, paperwork and associated record keeping to ensure they are on the right lines from day one. Nearly all my ltd co. clients have been on this, and you can really tell at year end as its a breeze as opposed to a nightmare doing their books, which of course equals lower fees. From my clients point of view it also means they don’t spend their first 18 months confused and worried about what they should/shouldn’t be doing. Most other accountants should of course do something similar to help you on your way.
Regards,
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James Smith
Chartered Accountant
www.jamesesmith.co.uk
01235 536 773
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