Limited Company formation

[David Yachovich]

Hi. I'm just filling in all the forms to create my Ltd company. I understand all except one area. So any help gladly received.

Withingthe forms it mentions shares of £100. In my case there are two directors, so I will put down £50 each.
I can also see (I have the lawpack kit) that a I should issue a share certificate to both of us (I will be the company secretary as well as a director).

The question is; Do I actually have to "do" anything i.e. put this 2 x £50 anywhere, e.g. like the business bank account? Or is it just a theoretical £100? Silly question perhaps but it is niggling me!

Thanks

David

[chris2007]

hi

i'm no expert, however if you are starting a LTD company this usually means that a set amount of money will be put into the business in the form of shares.

so taking into account that you both own 50% of the company, and have £100 in shares that have been issued then i think you will prob have to deposit the £100 into your Ltd company account.

you cannot take money out of, and put into the business accounts as if you were a sole trader as the ltd company is a seperate legal entity, and has to be done in a different manner as far as i know?

if your not sure on anything ring companies house. when i was looking into setting one up they were more than helpful.

good luck

chris

[Ashley]

I still owe my company £100 from many years ago, but if we ever go into insolvenvy I will have to hand it over.

You can just owe the company it for ever if you wish or you can put it in the bank account, if you go down the bank route have you accountant aware what it is.

[consultant]

no money exchanges hands. This is the nominal value of shares (sorry, my phrase may not be correct).

You will only pay your £30 or what ever!

[David Yachovich]

no money exchanges hands. This is the nominal value of shares (sorry, my phrase may not be correct).

You will only pay your £30 or what ever!

Thank you, and the other people who were kind enough to reply so speedily, it is really appreciated. Watch out for more questions!

David

[Ashley]

You set the nominal value of your shares at incorporation, this tends to be £1 per share. What this does is limit your liability to £1 for ever share you have.

As I said there is no obligation for the shareholders to pay for the shares they own. But the company can demand that the shares be 'paid up'. If the shares are paid up their can be no further liability of the shareholders in the event of liquidation. And as I said if the company goes into liquidation and the shares are not paid up you would need to pay over the nominal value of your shares to the creditors (which in your case above would be £50 each).

I would also heavily recommend a share holders agreement and a dicrotors agreement. I have copies of both you may have for free. Do not feel you don't need them they can help in any unforeseen circumstances in the future and also outline the get out plan, it makes me laugh reading this forum how many have not done so and the circumstances they find themselves in.

If you would like to see a copy of the ones I have PM me your email (they are in MS words), I would not recommend them for you as they ay not suit your set up but you they will give you a clear idea of what should be put down on paper.