hello elaine,
you replied to my post in the forum about paying salary in year one the changing to a dividend in year two.
I will give you a little further information, the company i have set up is to host a nationwide golf event and i have managed to secure many large sponsors - should have 18 by the end of the year, each sponsor has givenn me £4k worth of golf stuff to start selling to allow me to start generating some cash so i can quit my current job.
The event should create a turnover in £millions rather than thousands but this will not happen until 2010, in the meantime i have agreements to act as uk distributor for these companies and as such i am bringing in cash - until the event takes place i need to take an income and i understand that having formed a ltd company i have to formalise this somehow?
The initial 4k worth of products will become prizes for competitors in the actual golf event, but what i am doing at the moment is selling the £3k worth of each and re - ordering £1k at wholesale rate, therefore i am going to make money which isnt strictly speaking a profit as i will ultimately put these up as prizes.
I thought if i create a salary for myself this can be taken without the need to show a profit, whearas if its a dividend i have to take this from profit.
rambled on a bit
clear as mud?
thanks
kenny