First LTD company

[James Roberts]

Hi

I'd like to set up my first ltd company but don't fully understand how and at which stage of company setup I can decide how much funds there will be for the start? This is important because paying my own private money into a limited company at a later stage will become more complicated so I would like to make sure there is enough to get it off the ground at the very beginning.

Thank you
James

 

[Mr D]

Figure out what the company is going to be spending. Put money into the bank to cover that.

Paying money in later should not be more complicated. Just add it to directors loan account.

 

[James Roberts]

Thanks for your answer Mr D- figuring out how much the company is going to spend is the easier part. What I wasn't sure about was the second part of the question- so I can put my own private money into the company business account when the company is created? Is this during the company setup phase or is it when I open the business account for the company? Thanks and sorry if it seems a very basic question.

 

[Mr D]

I just did it when I opened the company bank account. Then added more later as and when wanting to invest more into the business.

You credit your directors loan account with that money. Later you can withdraw from your directors loan account without paying taxes on the sums.

 

[James Roberts]

Thank you very much Mr D- I think I understand it now. So when I open my business account, my bank will ask me how much do I want to put in and it is then when I will be able to decide how much to put in for the start and then adjust it with directors loan later on. Is that right?

 

[Opinion87]

No. You can transfer money from your personal account to your business account as a Directors Loan whenever you want.

 

[James Roberts]

Opinion87- right, so this can only be done via director's loans and not when I open the business bank account for my Ltd business?

 

[Opinion87]

Opinion87- right, so this can only be done via director's loans and not when I open the business bank account for my Ltd business?

No. You'll open a business bank account and that will be that. If you want to put money into the Limited Company, as a Company Director, you will transfer the money from your personal account, write a cheque etc. to the Limited Company bank account, and on your company accounts you'll class it as a Directors Loan. You can do this at any time you want, it doesn't have to be when you open a bank account.

 

[James Roberts]

Ok- all clear then. I wanted to know if I'll be able to do that when I open the bank account as I was already familiar with director's loans. Thanks.

 

[Opinion87]

Ok- all clear then. I wanted to know if I'll be able to do that when I open the bank account as I was already familiar with director's loans. Thanks.

I mean... it's six of one, half a dozen of the other. I've never been to the bank and had them open the account the same day, and... it doesn't really matter?